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Students, what are three types of public policies? • Distributive policies—target benefits to very Students, what are three types of public policies? • Distributive policies—target benefits to very narrowly defined groups or individuals

 • Redistributive policies—transfer resources from one group or class to another • Redistributive policies—transfer resources from one group or class to another

 • Regulatory policies are targeted at a group or class of groups • Regulatory policies are targeted at a group or class of groups

So, why must the government be continuously involved in keeping the economy on the So, why must the government be continuously involved in keeping the economy on the right path?

Natural problems of the business cycle The hardships they create for nearly everyone Examples: Natural problems of the business cycle The hardships they create for nearly everyone Examples: demands that political leaders do something about job shortages, housing issues and the stock market

What tend to be the 6 goals of a president’s economic policy? Economic growth—increase What tend to be the 6 goals of a president’s economic policy? Economic growth—increase in GDP Control inflation Positive balance of payments Maintain budgetary discipline Minimization of negative externalities Provide firm economic foundations

Mine were better than Bush’s were! We presidents all have fiscal policies. What are Mine were better than Bush’s were! We presidents all have fiscal policies. What are some of the political issues associated with them? I am Ben Bernanke, the Chairman of the Board of the Federal Reserve Board of Governors. What is our role in creating the monetary policy of the United States?

Federal Reserve Board is responsible for monetary policy Determines how much money is available Federal Reserve Board is responsible for monetary policy Determines how much money is available to businesses and individuals from financial institutions; can increase or decrease the money supply More money: lower interest rates & more consumer spending Less money: higher interest rates & less consumer spending (more savings)

Someone please define macroeconomic policy, fiscal policy and monetary policy. Macroeconomic policy is policy Someone please define macroeconomic policy, fiscal policy and monetary policy. Macroeconomic policy is policy that affects the performance of the economy as a whole.

Fiscal policy pertains to government efforts to affect overall output and incomes in the Fiscal policy pertains to government efforts to affect overall output and incomes in the economy through spending and taxing policies Monetary policy pertains to government efforts to affect the supply of money and the level of interest rates in the economy

Keynesians (John M. Keynes) Government intervention in the economy If tools of production are Keynesians (John M. Keynes) Government intervention in the economy If tools of production are not being used to full capacity (most of the time), government must increase spending and/or cut taxes Liberal Democrats

Monetarists (Milton Friedman) Federal Reserve Board should confine its activity so that it closely Monetarists (Milton Friedman) Federal Reserve Board should confine its activity so that it closely tracks the growth in productivity in the economy as a whole, stimulating slow but steady economic growth without inflation Balanced federal budgets are crucial Conservative Republicans

The Federal Budget Here is a good graphic showing the magnitude of the Federal The Federal Budget Here is a good graphic showing the magnitude of the Federal Budget Note the size of the national debt

The U. S. Budget Process (p. 565) For FY 2015 Feb-Mar 2013: President formulates The U. S. Budget Process (p. 565) For FY 2015 Feb-Mar 2013: President formulates general budget and fiscal guidelines Late Spring 2013: OMB issues specific budget guidelines for federal departments and agencies Aug-Oct 2013: Executive branch departments and agencies submit budget proposals to OMB reviews and directs refashioning

The U. S. Budget Process (p. 565)—p. 2 For FY 2015 Oct-Dec 2013: OMB The U. S. Budget Process (p. 565)—p. 2 For FY 2015 Oct-Dec 2013: OMB formulates department and agency budgets for presidential review Late Dec 2013: Following presidential feedback, OMB prepares data and final budget documents First Monday in Feb 2014: President submits budget to Congress (coincides with State of the Union Address)

The U. S. Budget Process (p. 565)—p. 3 For FY 2015 15 Feb 2014: The U. S. Budget Process (p. 565)—p. 3 For FY 2015 15 Feb 2014: Deadline for CBO to make recommendations to House and Senate Budget Committees on overall shape of budget Mar 2014: Standing committees send budget estimates to Budget Committees 1 Apr 2014: Deadline for House and Senate Budget Committees to issue a budget resolution on overall spending ceilings, revenues and fiscal outlook

The U. S. Budget Process (p. 565)—p. 4 For FY 2015 15 Apr 2014: The U. S. Budget Process (p. 565)—p. 4 For FY 2015 15 Apr 2014: House and Senate concurrent budget resolutions—guidelines for committee and subcommittee actions Mid-Apr to end of June 2014: House and Senate authorization committee actions House and Senate Appropriations Committees consider 13 -14 appropriations bills and mark up for floor action 30 June 2014: Deadline for House appropriations bills

The U. S. Budget Process (p. 565)—p. 5 For FY 2015 July to 15 The U. S. Budget Process (p. 565)—p. 5 For FY 2015 July to 15 Sep 2014: Senate completes action on appropriations bills; House. Senate conference committees meet to iron out differences; Full House and Senate vote up or down on conference reports 25 Sep 2014: Deadline for second concurrent resolution on overall budget, specifying total spending in all bills, etc.

The U. S. Budget Process (p. 565)—p. 6 For FY 2015 July to Sep The U. S. Budget Process (p. 565)—p. 6 For FY 2015 July to Sep 2014: President signs appropriations bills after passed by both houses of Congress 1 Oct 2014: Fiscal Year 2015 begins

Students, how much did the federal government spend in 2010? $3. 7 trillion, about Students, how much did the federal government spend in 2010? $3. 7 trillion, about 25% of the GDP

Why has federal government spending, as a percentage of the GDP, changed over the Why has federal government spending, as a percentage of the GDP, changed over the years? 1. Involvement in major wars—most dramatic increases 2. Relative spending level increased steadily 1930 s to 1980 s—decrease due to decrease in defense spending

Please continue. 3. Wars in the Middle East and the Medicare prescription drug program Please continue. 3. Wars in the Middle East and the Medicare prescription drug program 4. Combination of massive stimulus spending, contraction of GDP, and falling tax receipts

Students, what is mandatory spending? The largest portion of the federal budget, over which Students, what is mandatory spending? The largest portion of the federal budget, over which Congress and the president exercise little real control (many are entitlements such as Medicare and Social Security)

Students, discuss discretionary spending in the 2010 federal budget. Money not tied to a Students, discuss discretionary spending in the 2010 federal budget. Money not tied to a formula that automatically provides money to some program or purpose 61% in 2010: national defense $719 billion— 19% of total federal budget $42 billion to homeland security 18%--all other federal programs

U. S. federal tax system contrasted with tax systems of other wealthy world democracies U. S. federal tax system contrasted with tax systems of other wealthy world democracies Relatively low as a proportion of GDP Taxes as a percentage of incomes has been relatively constant for 30 years

Why is the American tax system “uniquely complex? ” U. S. Tax Code is Why is the American tax system “uniquely complex? ” U. S. Tax Code is a voluminous document Numerous loopholes and exceptions to rules and special treatment to certain individuals and other entities Few people understand the Tax Code

Progressive taxes—higher income people are taxed at a higher rate Regressive taxes—lower income individuals Progressive taxes—higher income people are taxed at a higher rate Regressive taxes—lower income individuals are taxed at a higher rate because taxes take a higher percentage of their income (sales taxes) U. S. tax system is relatively flat: most people in the U. S. pay about the same percentage of their income in taxes

OK, what was the U. S. Wow! I did that? ? ? OK, government’s OK, what was the U. S. Wow! I did that? ? ? OK, government’s budget so what is the national deficit debt? in 2010? The 2010 budget deficit was $1. 6 trillion It is the total of what the government owes in the form of Treasury bonds, bills, and notes to American citizens and institutions, foreign individuals and institutions, and to itself.

Finally in this chapter, what are government regulations and why does the government make Finally in this chapter, what are government regulations and why does the government make and enforce them? Government regulations are rules by government agencies with the aim of reducing the scale of negative externalities produced by private firms. Private businesses and institutions have difficulty solving many negative externalities; it falls to government to solve them

In many ways we Republicans favor deregulation. What is that? The attempt to loosen In many ways we Republicans favor deregulation. What is that? The attempt to loosen the hand of government in a variety of economic sectors including banking and finance, transportation, and telecommunications.

Why is the United States considered an economic superpower? Annual GDP: $14. 3 trillion Why is the United States considered an economic superpower? Annual GDP: $14. 3 trillion (equal to the COMBINED economies of the next four largest economies in the world) Three times larger than China First in the world in total imports U. S. -headquartered companies are prominent internationally U. S. corporations increasingly global

Also, since the 1930 s, the U. S. has pursued the goal of establishing Also, since the 1930 s, the U. S. has pursued the goal of establishing free and open trade with the other nations of the world. Sometimes the U. S. has used a trade embargo to punish nations that are involved in actions or policies with which the U. S. government does not agree (South Africa, 19851991)

My dad and I are both proud to have served in the U. S. My dad and I are both proud to have served in the U. S. military. What factors make U. S. military power preeminent?

The U. S. armed forces are the most powerful armed force in the world The U. S. armed forces are the most powerful armed force in the world Defense Budget: 6 x greater than Russia 9 x greater than China 12 x greater than UK The U. S. defense budget is greater than the combined spending of the next 25 largest national defense spending nations 1. 4 million active military

Naval, air and ground warfare capabilities are unrivaled. Electronic warfare capabilities unrivaled Strategic force: Naval, air and ground warfare capabilities are unrivaled. Electronic warfare capabilities unrivaled Strategic force: 1000 missiles/6000 nuclear warheads (submarine & ICBM) Only nation with permanent and often sizeable military bases in every part of the world

Example: Bosnia “Only the U. S. military could get the situation under control. ” Example: Bosnia “Only the U. S. military could get the situation under control. ”

U. S. forces stretched thin: Janston: 1 tour in Iraq, one in Afghanistan; Niki: U. S. forces stretched thin: Janston: 1 tour in Iraq, one in Afghanistan; Niki: 1 tour in Iraq, one in Qatar; Peter: 1 tour in Afghanistan; Benny: in 2 nd year of life, Mommy & Daddy together only 6 weeks.

Why is the U. S. military clearly overstretched? Partly the result of decreasing the Why is the U. S. military clearly overstretched? Partly the result of decreasing the size of the military— 2 million in early 1990 s to 1. 6 million in 2009 Multiple deployments with significant psychological affects on military personnel and their families

Why is combating terrorism a significant challenge? Terrorist is not a country Loosely organized Why is combating terrorism a significant challenge? Terrorist is not a country Loosely organized shadow cells U. S. military cannot control events in major oil-producing countries Resourceful enemies using asymmetric warfare tactics and weapons

American “soft power” Cultural power of the United States Mc. Donalds KFC Theme parks American “soft power” Cultural power of the United States Mc. Donalds KFC Theme parks Hollywood movies T. V. sitcoms Example: anorexia in Fiji Soft power is the attractiveness of a nation’s culture, ideology and way of life for people living in other countries Example: English is the language of business, the Internet, science, air travel

Throughout U. S. history, the basic goals of U. S. foreign policy have remained Throughout U. S. history, the basic goals of U. S. foreign policy have remained somewhat constant: Maintain national security Support democracy Promote world peace Provide aid to people in need

Now we are going to discuss contrasting schools of thought regarding using American power. Now we are going to discuss contrasting schools of thought regarding using American power. For many years, the foreign policy of the U. S. was one of isolationism—the view that the U. S. should tend to domestic affairs rather than get involved in international affairs.

Unilateralists, believe that the U. S. should “go it alone” in foreign affairs The Unilateralists, believe that the U. S. should “go it alone” in foreign affairs The U. S. should act on its own terms and use U. S. power unilaterally That was the way I did business!!!

An alternative view is the internationalist, or multilateralist, view: the belief that the U. An alternative view is the internationalist, or multilateralist, view: the belief that the U. S. should take an active role in international affairs to promote U. S. Interests, but cooperate and collaborate more with other nations Internationalists believe that the U. S. should try to gain allies that are militarily strong and strategically located U. S. foreign policy since World War II has been more internationalist

Throughout U. S. history, there has been general acceptance that the president has been Throughout U. S. history, there has been general acceptance that the president has been the government’s leader in foreign relations. Some presidents have set foreign policy through doctrines such as the Monroe Doctrine (1823), the Roosevelt Corollary (to the Monroe Doctrine), and the Truman Doctrine.

Other presidents have conducted foreign relations and made foreign policy through summit conferences. Examples Other presidents have conducted foreign relations and made foreign policy through summit conferences. Examples of summit conferences are: President Franklin Roosevelt’s Big 3 Conferences during World War II, the Nixon-Brezhnev Summits (1970 s), and The Reagan-Gorbachev Summits (1980 s)

Now we are going to tell you some of the highlights of U. S. Now we are going to tell you some of the highlights of U. S. foreign policy history. Since our beginning as a nation, we’ve pretty much always sought to trade with foreign countries. But, I was for being neutral in international conflicts and I cautioned Congress to not get involved in European affairs.

Now we are going to tell you some of the highlights of U. S. Now we are going to tell you some of the highlights of U. S. foreign policy history. The Monroe Doctrine of 1823

Highlights in U. S. Foreign Policy The Spanish-American War of 1898—the U. S. emerges Highlights in U. S. Foreign Policy The Spanish-American War of 1898—the U. S. emerges as a world power

Highlights in U. S. Foreign Policy The Roosevelt Corollary and the Great White Fleet Highlights in U. S. Foreign Policy The Roosevelt Corollary and the Great White Fleet (1907).

Highlights in U. S. Foreign Policy World War I (1917 -18)—the U. S. becomes Highlights in U. S. Foreign Policy World War I (1917 -18)—the U. S. becomes a major player in world affairs but also retreats back into isolationism President Wilson takes a leading role in the Versailles Peace process and creates the League of Nations

Highlights in U. S. Foreign Policy World War II (1941 -45)—the U. S. leads Highlights in U. S. Foreign Policy World War II (1941 -45)—the U. S. leads the effort to defeat the Axis Powers and emerges, with the Soviet Union, as one of the two most powerful nations in the world. The U. S. emerges from a policy of isolationism and becomes a leader in the development of the United Nations

Since World War II, the U. S. has also engaged in a foreign policy Since World War II, the U. S. has also engaged in a foreign policy based on providing foreign aid to other nations, entering into defense alliances and participating in international organizations Foreign Aid: The Marshall Plan: 1948 -1952, $13 billion 16 W. Eur. Countries President Truman Secretary of State George C. Marshall

Foreign Aid U. S. Agency for International Development—part of State Department— responsible for implementing Foreign Aid U. S. Agency for International Development—part of State Department— responsible for implementing foreign aid 1961 President John F. Kennedy Initiates the Peace Corps

Highlights in U. S. Foreign Policy The Cold War: 1947 -1989 The Truman Doctrine Highlights in U. S. Foreign Policy The Cold War: 1947 -1989 The Truman Doctrine of containment The Korean War (1950 -53) Eisenhower & Kennedy: Mutually Assured Destruction (MAD) The Cuban Missile Crisis (1962)

Highlights in U. S. Foreign Policy Détente (relaxation of cold relations) 1972 -early 1980 Highlights in U. S. Foreign Policy Détente (relaxation of cold relations) 1972 -early 1980 s

Highlights in U. S. Foreign Policy Glastnost (openness), perestroika (economic restructuring) and the fall Highlights in U. S. Foreign Policy Glastnost (openness), perestroika (economic restructuring) and the fall of the Soviet Union, ending the Cold War Reagan policies counter Soviet military build-up; USSR becomes an economic basket case. Mikhail Gorbachev signs several treaties with Reagan and Bush

Highlights in U. S. Foreign Policy G. H. W. Bush, Clinton and G. W. Highlights in U. S. Foreign Policy G. H. W. Bush, Clinton and G. W. Bush make U. S. the world’s policeman G. H. W. Bush: Panama, Desert Storm and Somalia Clinton: Bosnia-Herzegovina & Haiti G. W. Bush: War on Terror & Iraq

Notable alliances—collective security The North Atlantic Treaty Organization (NATO)— 1949 multilateral treaty for collective Notable alliances—collective security The North Atlantic Treaty Organization (NATO)— 1949 multilateral treaty for collective security against the Soviet Union and the Warsaw Pact

International organizations for peaceful resolution of international differences Since 1945, the U. S. has International organizations for peaceful resolution of international differences Since 1945, the U. S. has been a member of the United Nations One of 5 permanent members of the Security Council with the power to veto any resolution

Threats to American security today Terrorism Weapons of Mass Destruction Threats to American security today Terrorism Weapons of Mass Destruction

 • Aid to >100 countries • Contributions to various U. N. development funds • Aid to >100 countries • Contributions to various U. N. development funds • About $15 billion per year • Most aid to a few countries considered of strategic importance: Israel, Egypt, Ukraine, Jordan, India, Russia, South Africa, Haiti • Much of what is considered foreign aid is actually spent in the US where it pays for the purchase of American services and products being sent to those countries

Now we are going to discuss how the U. S. government makes foreign policy. Now we are going to discuss how the U. S. government makes foreign policy. Since the beginning of our nation, the President and the Executive Branch have had the main role in formulating and executing foreign policy. The role of Congress is funding, oversight and Senate approval of treaties. The Judiciary traditionally has only a minimal role in foreign policy.

The key people in making U. S. foreign policy are the president (B. Obama) The key people in making U. S. foreign policy are the president (B. Obama) The Vice President (J. Biden); The Secretary of State (H. Clinton), the Secretary of Defense (L. Panetta) , the Director of Central Intelligence (D. Petraeus) and the National Security Advisor (T. Donilon)

The primary cabinet department responsible foreign affairs is the Department of State The State The primary cabinet department responsible foreign affairs is the Department of State The State Department maintains diplomatic relations with about 180 countries throughout the world as well as the United Nations and several international organizations.

I am CIA director David Petreaus. What is the role of my agency? Role: I am CIA director David Petreaus. What is the role of my agency? Role: coordinate and integrate intelligence products of the State Department’s Bureau of Intelligence and Research, the Defense Intelligence Agency (which combines the intelligence operations of the Army, Navy, AF and USMC), the National Security Agency (electronic recon and code breaking), super secret National Reconnaissance Office (satellite intelligence programs), FBI, and other agencies

John, what is the role of Congress in foreign affairs? Nancy, it is mainly John, what is the role of Congress in foreign affairs? Nancy, it is mainly consultative. • Has taken the initiative in some trade and foreign economic and military assistance questions • Is authorized to define the limits of presidential warmaking powers • Budget-making powers • Investigative powers • Congress is often divided on a number of issues

Now we are going to spend a few minutes discussing my department, the Department Now we are going to spend a few minutes discussing my department, the Department of Defense. Hey, I used to work there.

The Department of Defense (DOD) employs 800, 000 civilians and 1. 4 million members The Department of Defense (DOD) employs 800, 000 civilians and 1. 4 million members of the armed forces. James Madison here. You may recall that when my fellow Founders and I wrote the Constitution, we feared a military that was too strong. Therefore, the U. S. military is led by civilians: the president, the Secretary of Defense, the Under Secretary and the service secretaries (Army, Navy & A. F. )

Working under the civilian leaders, the most senior military officers comprise the Joint Chiefs Working under the civilian leaders, the most senior military officers comprise the Joint Chiefs of Staff—fourstar officers Chairman (GEN Martin Dempsey, USA) Vice Chairman (ADM James Winnefeld) Chief of Staff, Army (GEN Odierno) Chief of Naval Operations (ADM Greenert) Commandant, USMC (GEN Amos) Chief of Staff, USAF (GEN Schwartz) Chief NGB (GEN Mc. Kinley)

The armed forces provide the “muscle” to help the president carry out his or The armed forces provide the “muscle” to help the president carry out his or her foreign policy.

When should the U. S. become involved militarily in a regional hot spot or When should the U. S. become involved militarily in a regional hot spot or situation? The (Caspar) Weinberger Six Tests 1. Is the engagement or occasion vital to our national interest? 2. The commitment should only be made with a clear intention of winning 3. It should be carried out with clearly defined political and military objectives 4. It must be continually reassessed and readjusted if necessary 5. It should have the support of the American people 6. It should be a last resort

Students, I am former Secretary of State, Colin Powell. The textbook says I had Students, I am former Secretary of State, Colin Powell. The textbook says I had a philosophy known as the Powell Doctrine. I actually adopted that doctrine from one held by my former boss, President Reagan’s Secretary of Defense, Caspar Weinberger. When the US goes to war, it should be for a clear purpose, only when our vital national security interests are threatened and our goal should be overwhelming victory

The U. S. Catholic Bishops and Just-War Criteria (Jus ad Bellum) 1. Just cause The U. S. Catholic Bishops and Just-War Criteria (Jus ad Bellum) 1. Just cause 2. Made by competent authority 3. Comparative justice—which side is sufficiently right and are the values at stake critical enough to warrant war (justify killing)? 4. Right intention 5. Last Resort 6. Probability of success 7. Proportionality—costs must be proportionate to the good expected (today in the international community)