Shared Flashcard Set

Details

Economic Policy
US Economic Policy
63
Political Studies
Undergraduate 3
07/29/2010

Additional Political Studies Flashcards

 


 

Cards

Term
What does Article I say about fiscal policy?
Definition
That in order to spend money it has to be authorized and appropriated.
Term
What is authorization in the budget process?
Definition
It sets the spending cap.
Term
What is appropriations in the budget process?
Definition
Spending may be less than, but not more than authorization.
Term
What does the 16th amendment allow?
Definition
Authorizes government to collect an income tax.
Term
What was the Budget and Accounting Act of 1921?
Definition
Established framework for federal budget. Required the President to submit an annual budget to Congress.
Term
What was the Employment Act of 1946?
Definition
Required federal government to track inflation, interest rates, unemployment, and GDP for 4 years and include that in budget consideration.
Term
What theory was the Employment Act of 1946 based on?
Definition
Keynesian theory that government should intervene when there is high unemployment.
Term
What was the Congressional Budget and Impoundment Act of 1974?
Definition
Law that governed the role of Congress in the US budget process.
Term
What was the Budget Enforcement Act of 1990?
Definition
Created 2 new budget control processes. 1). A set of caps on annually-appropriated spending. 2). A pay-as-you-go process for entitlements and taxes.
Term
What is the Congressional Budget Office (CBO)?
Definition
Legislative (Congress) agency that evaluates the effects of estimated future deficits and growing federal debt on U.S. economic growth, the flexibility of future fiscal policy, and the risk of a sudden fiscal crisis. Created by the Congressional Budget and Impoundment Act of 1974.
Term
What is the Office of Budget and Management (OMB)?
Definition
Executive branch agency to prepare the federal budget. Helps formulate the President's spending plans.
Term

 

 

 

Mandatory v. Discretionary Spending

Definition

Mandatory - Entitlements

  • SS, non means tested
  • SSI means tested
  • Medicare non means tested
  • Medicaid means tested
  • Food Stamps means tested
  • Veteran's Benefits some are some are not means tested 

Discretionary=everything else

Term
What kind of tax is S.S.?
Definition
A regressive Tax.
Term
Is SS means tested?
Definition
No its benefits apply to all!
Term
Some problems of SS?
Definition
Federal government has been borrowing from SS to offset debt. It is being paid to people who don't need it.
Term
What is the US debt at now?
Definition
13 trillion dollars.
Term
What is a free rider?
Definition
People who benefit from programs but don't contribute to the costs.
Term
What do most people think government should do with economic policy?
Definition
Tax and provide for national defense.
Term
What's a common misunderstanding of Capitalism?
Definition
It doesn't mean a country has a democratic form of government. Ex. China
Term
What is the definition of inflation?
Definition
When prices rise higher than wages.
Term
Define Recession.
Definition
when you have two or more quarters of falling production. Production is measured in GDP.
Term
Define Depression
Definition
When you have a prolonged period of high unemployment.
Term
What is a common goal of all Economies?
Definition
Low inflation, low unemployment, higher production.
Term
What is Fiscal Policy?
Definition
Government spending and taxing. Congress and President determine fiscal policy. They Tax, Spend, and Manage Debt.
Term
What is the philosophy of Keynes?
Definition
Government should intervene when there is high unemployment.
Term
What is the philosophy of Adam Smith?
Definition
We all benefit if everybody seeks their own self-interest. Invisible hand man.
Term
What is Monetary Policy?
Definition
Influencing the economy by manipulating the money supply done by the FED.
Term
How does the FED influence the money supply?
Definition
Raising/lowering interest rates, buying and selling government bonds, and manipulating the reserve requirements.
Term
What are 3 prominent divisions of the FED?
Definition
1. Federal Reserve Board
2. Open Market Committee
3. Member Banks
Term
What is US tax burden like compared to the world?
Definition
US tax burden is the lowest.
Term
Who do Social Welfare programs benefit?
Definition
Poor, Middle Class, Upper Class.
Term
Where do most subsidies go to?
Definition
Upper and middle income earners.
Term
What is SSI
Definition
Social Insurance not welfare.
Term
When were social programs started?
Definition
1930's New Deal.
Term
How much is the federal budget dedicated to mandatory spending?
Definition
63%!
Term
What does the CBO do?
Definition
Creates a baseline budget, so they can compare what congress thinks is going on with the president's budget. (omb)
Term
What is an example of a subsidy?
Definition
A student Loan.
Term
Every program that is enacted has a ____.
Definition
Answer: Cost.
Term

 

 

 

The Budget Process

Definition
  1. Preparation - formulation of president's budget for the fiscal year.
  2. Approval - president's plan transmitted to Congress for approval. 
  3. Appropriations - Congressional action on budget. (authorization/appropriation)
  4. Execution - agency program managers execute budget provided in law.
  5. Audit - Data on actual spending becomes available for completed fiscal year.
Term
What are the 3 tools of Fiscal Policy?
Definition
1. Taxing
2. Spending
3. Debt Management
Term
What are the 3 tools of monetary policy?
Definition
1. reserve requirements - increase RR, then decrease money supply.
2. discount rate - (interest rates) raise rates decrease money supply.
3. Open market operations - buying and selling of government bonds. Selling bonds decreases the money supply.
Term
What is Laissez Faire?
Definition
As long as government does not intervene, market forces will correct themselves if left alone. Invisible hand of the market.
Term
The Progressive Era
Definition
Middle Class Reform Movement.
Leaders thought that society could be made better. Wanted better working conditions, more equality of treatment while maintaining profitable growth.
Term
FDR's New Deal
Definition
Based on Keynesian economics. New Deal represented new part on government to invest in remedying failing markets.
Term
What is an example of environmental policy having an economic trade-off?
Definition
EPA was created to consolidate services for solid wastes, water, and air.
Term
Bretton Woods
Definition
An agreement that created IMF and World Bank. Nixon did away with it (took us off gold standard.) Now we have floating currency.
Term
What is a Floating Currency?
Definition
value of currency derived by indexing currencies to the dollar based on our economic strength relative to our trading partners.
Term
What kind of Economy is USA
Definition
Mixed Economy
Term
When value of a Nation's money is low, their exports increase.
Definition
China controls the value of their money artificially.
Term
What is a pure capitalistic economy?
Definition
prices, wages, working conditions are controlled by the market.
Term
What is a socialistic economy?
Definition
means of production, prices, wages etc. are controlled by the government.
Term
Most economies in the world today are _____ economies.
Definition
Answer: Mixed
Term
Who sets the National debt limit?
Definition
Congress. When limit is reached, they vote a higher one. ting-a-ling.
Term
Who holds most of US debt?
Definition
Japan and China
Term
The Entire cost of programs for the poor is less than tax breaks and programs and incentives designed to aid middle and upper income earners.
Definition
lotsa luck!
Term
What is a twin deficit?
Definition
When you have both a trade and budget deficit.
Term
Who are #1 and #2 trading partners for US?
Definition
1. Canada
2. China
Term
Economic Policy is controlled by. ______
Definition
Elite assholes.
Term
Impact of Globalization
Definition
lowered wages for unskilled workers. Moved most unskilled jobs out of country. raised wages of higher skilled workers. US a tertiary provider.
Term
How much international trade is goin on?
Definition
25 trillion worth of trade crosses borders each year.
Term
Medicare
Definition
compulsory with SS
non means tested
Term
Medicaid
Definition
means tested
fed govt covers over half of health costs. States set their own guidelines.
Term
SCHIP
Definition
state/federal partnership
assistance to needy children.
means tested.
Supporting users have an ad free experience!