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Chapter 16-18
Govt 2305
| Question | Answer |
|---|---|
| ownership of the "means of production" | who owns the factory? |
| capitalism | private ownership |
| socialism | state ownership |
| US mixed economy | 2/3 private,1/3 public |
| Gross Domestic Product (GDP) | $14 billion |
| inflation and unemployment usually have... | an inverse relationship |
| to reduce unemployment congress and president can.. | increase taxes to increase individual income, increase spending to create more jobs |
| to reduce inflation congress & the president can.. | increase taxes to reduce individual income, reduce spending to reduce jobs |
| macroeconomic mechanisms: fiscal policy | mechanisms which the govt will undertake that will effect everybody |
| fiscal policy | budgeting, spending, taxing, & borrowing; balanced, deficit, or surplus |
| balanced budget | spending is equal to what you have; spending=revenue or income |
| budget surplus | have more money than spent; spending <revenue or income |
| budget deficit | spending more than your income; spending > revenue or income-borrowing money to make up the difference |
| national deficit | amount spending exceeds income or revenue in any given year-won't have to borrow money to make it up |
| national debt | cumulative debt from budget deficits over a number of years; only way to reduce debt is to stop deficits |
| federal budget FY 2009= | $3.8 trillion outlays; $2.2 trillion receipts |
| deficit FY 2007= | $1.6 trillion |
| national debt= | $12 trillion (spread out over 30 years) |
| inflation= | less than 3% per year |
| unemployment october 2009= | 10.2% |
| monetary policy | control of supply of money & credit by federal reserve board, chair-ben bernanke; 12 federal banks, open market committee makes policy governors & representatives from federal reserve banks |
| monetary policy regulates.. | supply of money and credit |
| federal reserve board | independent regulatory agency |
| interest rates | discount-rate the fed reserve board banks charge member banks for loans=0.50%; federal funds target rate-rate that banks charge each other (overnight loans)=0.25% |
| more money floating around..less money floating around... | more supply; less supply |
| hierachy of credit | credit cards, car loans, mortgage loans, prime rate (3.25%); federal discount rate (0.50%); federal funds target rate (0.25) |
| reserve requirement | amount or percentage of $$-banks are required to keep on hand in vault overnight; increase requirement to curtail ability of bank to make loans; decrease requirement to increase ability of banks to make loans |
| open market committee | buy US government securities (bonds or notes) to increase amount of money in circulation; sell US govt securities to reduce amount of money in circulation |
| when there is economic expansion (high inflation), you want to reduce... | economic activity |
| high inflation | fiscal policy-less govt spending (entitlements & public works), increase taxes (lower deficit or more surplus); raise the interest rate, raise the reserve requirement, sell US govt securities; but you may increase unemployment & reduce the GDP |
| when there is ecomonic contraction (high un-employment), you want to.. | increase economic activity |
| economic contraction | more govt spending (entitlements & public works), reduce taxes (higher deficit or less surplus); lower the interest rate, lower the reserve requirement, buy US govt securities, you may increase inflation |
| US currency | one of the prime currencies that's traded on national market |
| dollar is currently weakening relative to.. | some other major currencies |
| if dollar is weak.. | more exports, fewer imports, more foreign travel to US |
| if dollar is strong.. | more imports, fewer exports, more US travel to foreign countries |
| higher interest rates | may lead to a reduction in economic activity & a reduction in the GDP; may lead to a reduction in inflation, may lead to a stronger dollar (relative to other currencies), more imports, fewer exports, more US travel to foreign countries |
| lower interest rates may lead to.. | an increase in economic activity & an increase in GDP, an increase in inflation, to a weaker dollar (relative to other currencies), more exports, fewer imports, more foreign travel to US |
| Keynesian policy | works well in time of economic contration but doesn't work well when economy expanding |
| keynesian policy is.. | demand based-percolate up; ecnomic contration-more govt spending, even deficit spending to stimulate economy; economic expansion-more taxes to dampen economy; problem=hard to reduce govt spending & increase taxes |
| supply side policy | supply based-trickle down |
| specific industries of microeconomic mechanisms | regulations (deregulation),anti-trust requirements, subsidies or price supports, tax breaks-targeted to individuals, trade policy (tariffs), capital gain tax-if you have an investment & investment grows; inheritance tax-impose inheritance taxes on estates |
| progressive taxation | income tax-everybody pays same rate |
| proportional taxation | all same % of income |
| regressive taxation | sales & property tax |
| federalism taxation | every level taxes |
| redistribution of income taxation | mainly benefits middle class |
| everyone pays tax equity according to.. | their ability (income taxes) |
| everyone pays the same.. | amount of tax equity (user fees), tax rate (sales & property taxes), proportion of their income-flat tax |
| income tax percentages | 0%,15%, 28%-most common, 31%, 33%-small rich group |
| exemptions, deductions, & capital gains | almost all of us have these, reduces total % |
| excise tax | federal & state- taxes on specific items (sin taxes-targeted to things we shouldn't be using-cigarettes) |
| sales tax | state & local |
| property tax | state & local |
| user fees | federal, state, & local |
| social insurance taxes | federal; social security & medicare |
| entitlement | who is entitled to receive benefits? |
| benefits of social welfare | how are these distributed? |
| financing | from where? |
| programs | who are they? |
| entitlement based on characteristic | if you qualify for the benefit you cannot be denied the benefit |
| older entitlements | social security, medicare, supplemental security income (SSI) |
| younger entitlements | K-12 education |
| diability entitlements | social security, medicare, SSI |
| umemployment entitlements, injured on the job | unemployment insurance |
| entitlement based on income (means-tested) | temporary assistance to needy families (welfare), medicaid, supplemental security income-based on age & a means test, nutrition programs, food stamps (texas lone star card), WIC, school breakfast & lunch programs, housing-rent subsides or public housing |
| benefits of social welfare | welfare means public well-being, not necessarily public assistance, cash, vocher card for services |
| OASDI (old age, survivors, & disability insurance)-social security | description (pensions), entitlement-(contributor-age, partial @62, full@65+), survivors, disabilty, benefit-cash, funding-insurance program comes from trust fund-FICA payroll deduction |
| Medicare | health insurance for elderly or severely disabled, entitlement-contributor age-65) or disability, benefit-voucher card for services, funding-part A-hospitalization from payroll deduction, part- B-out-patient services-premium; part D-prescription drugs |
| supplemental security income | assistance income for indigent elderly or disabled & have to pass a means-test; entitlement-eligible for OASDI & indigent (means tested); benefit-cash, funding-fed. income tax revenue |
| temporary assistance to needy families | income assistance for indigent; entitlement-indigent-means tested, benefit-cash, funding-matching funds federal grant & state funding; a work requirement was added in 1990's-have to work & not make over a certain amount to get in |
| medicaid | health insurance for indigent; entitlement-indigent-means tested, benefit-voucher card for services, funding-matching funds federal grant & state funds |
| food and nutrition programs | food stamps, women & children, & school breakfast & lunch programs, & meals@missions, food banks, &meals on wheels, entitlement-indigent-means tested, benefit-voucher card for services, funding-matching funds, federal grant & state funding & charity |
| housing subsidies or public housing projects | help w/housing costs-public housing or rent voucher; entitlement-indigent-means tested, benefit-voucher card for services, funding-mostly federal grants, some state funding is availble |
| unemployment insurance | replaces about half of old salary, temporary income program for those employed, entitlement-unemployment, benefit-cash, funding-matching funds federal grant & state funding; unemployment rate=10.2% |
| workman's compensation | medical insurance if injured on the job, entitlement=injured on job, benefit-voucher card for service, funding-employer pays into insurance program |
| employer contributions to.. | pension plan & health insurance |
| interest on.. | owner-occupied home mortgage |
| local taxes on.. | owner-occupied home |
| large catastrophic.. | medical expenses |
| earned income tax credit | refunds withholding for working poor-holding tax for the working peer |
| income redistribution | OASDI & medicare are semi-insurance programs & b/c of tax benefits or deductions, the main beneficiaries of federal social programs in the US are the middle class; < than 1/3 of fed. social welfare spending is means-tested spending |
| poverty | varies from yr to yr; includes basic food, clothing, housing;does not include medical expenses, widening gap between richest quintile & poorest quintile, 2008=13.2% were below poverty level |
| issues of poverty | causes of poverty=conservative-individual, liberal-external, funding=OASDI & medicare trust funds need to be replenished; increasing cost providing health care-mostly provided by employers undermining US position in global competiton |
| history | isolation-monroe doctrine; internationalism-world wars I & II, marshall plan, cold war-bipolar US & USSR, truman doctrine-containment, counter insurgency-korean war, vietnam war, central america-we spent a lot of $$ to rebuild germ, japan, england, france |
| post cold war | soviet union collasped economically in 1991; US balancer or "world policemen" or isolationism?; nationalism & ethnicity-separation movements-palestinians, africa-congo(most compelling); indonesia, balkans, terrorism & counter-terrorism: afghanistan & iraq |
| course of action diplomacy: President & Secretary of State | summit meetings (one on one, meetings international organizations-more than 2 groups involved); personality, social & ceremonial. |
| course of action economic | trade-US trade representative-cabinet rank of official; world trade organization-teeth-can enforce it's decisions, direct aid-has strings attached, loans-stabilize economy + finance |
| US provides some loans through.. | US export-import bank, world bank-loan $$ to countries to allow them to build major infrastructure, international monetary fund |
| course of action military: president & defense department | protect national interests-treat to national security; what are our national interests? -democracy; international cooperation peacekeeping: civil war, ethnic unrest, promote democracy, who is in command? (sovereighty) US demands to be in charge |
| players: president | head of state-social & ceremonial; head of govt-commander in chief, treaties & executive agreements, recognition of countries, appoint & receive ambassadors, recognition of countries-libia-most recent, appoint & receive ambassadors, US trade Representativ |
| US trade representative & ambassadors | two |
| players: secretary of state-hillary clinton | organization by function, arm control, intelligence, AID, etc; organize by geography, each country has a country desk, ambassadors- need to promote economic relations/trade; ambassador to the United Nations-cabinet rank |
| players:secretary of defense-robert gates | chain of command-civilian control of military, president commander in chief, secretary of defense, chairman of the joint chiefs of staff-advisory, secretaries of each branch of service, military chiefs of each branch service |
| military | air force-department of defense, navy- department of defense, army-department of defense, marine corps- department of defense, coast guard-department of homeland security -protect coast waterways & ports, rescue operations, drug interdiction & pirary, |
| intelligence-->15 agencies | CIA-supposed to be keeping an eye on things @ home, individual agency-reports directly to pres, FBI-part of defense of justice, DIA-D of defense; INR-state department; Elint(electronic intelligence)-FISA (foreign intelligence survelliance act; court |
| national security council | national security advisor-national security council; advise the president, coordinate foreign policy between state department, department of defense & the intelligence community |
| congress | purse strings, declare war?-war powers act, senate advise & consent-administrative appts, all ambassadors, senate ratify treaties (2/3), bipartisanship?-has been diminished; pres can no longer count on this for foreign policy |
| other secretaries | sec of treasury, sec of commerce, sec of agriculture, sec of labor |
| international: united nations- | provides military force when necessary; secretary general-Ban Ki-moon, general assembly-legislative branch, security council-executive branch |
| security council | 5 permanent members(veto), US, UK, France, China, & Russia; 10 elected by general assembly- 2 yr term-5 each year; presidency rotates each month |
| Other UN agencies | international court of justice-voluntary-nation must accept jurisdiction, war crimes tribunal, international criminal court-US has not joined, world health organization, commissioner of refugees, comissioner of human rights |
| International: US membership | north atlantic treaty organization (NATO); organization of american states (OAS); asia & pacific economic council (APEC); Big 7 (+1)-economic summit; world trade organization |
| international: other players-interest groups | multinational corporations (MNCs); non-governmental organizations (NGOs) |
| trends in the 21st century | globalization-global economic competition, nationalism & ethnic empowerment & separatism (including piracy); democratization-political empowerment; economic development-economic empowerment; terrorism-ideology/religion; unilateral or multilateral response |
| threats in the 21st century | terrorism, separation (nationalistic, ethnic, piracy); environmental (global warning);economic recession or depression-worldwide; weapons of mass destruction |
| terrorism post 9/11 | al qaeda & proliferation of other terrorist organizations, trans-national networks, ideology or religion, state-supported terrorism, acquire/use weapons of mass destruct, anti-insurgency & anti-terrorism |
| weapons against terrorism | military-preemptive strikes,counter-insurgency, counter-terrorism; financial, intelligence, economic development, democratization, peacekeeping |
| weapons of mass destruction | biological, chemical, nuclear, nuclear disarmament treaties w/ russia, antiballistic missile treaty, ABM ballistic defense system,US strategic defense initiative system, limitation treaties, reduction tlks, START I, treaty of moscow,disassembly of weapons |
| START I | nuclear delivery systems=1600, warheads=6000, expires Dec 5th, 2009 |
| treaty of moscow(2002) | 1700-2200 warheads by 2012 |
| antiballistic missile treaty | US strategic defense initiative system (star wars system) |
| current neotiations proposal | delivery systems= 500-1000; warheads=1500-1675; ultimate goal=eliminate all nuclear weapons; mutually assured destruction (MAD)-second strike capability; US & USSR & india & pakistan |
Created by:
stephparnell