I) Making public policy:

-Are actions taken by GOVERNMENT to respond to problems/issues raised in political

 system. (p. 388)



A) 6 stages in policymaking:

                        1) Issue identification: attention called to a problem needing government action. (p 389)

            2) Agenda setting: issue/problem considered by policy makers. Doesn't equal

    immediate action. (p 389)

                        3) Policy formation: pros/cons of issue deliberated/TALKED ABOUT. (p 390)

4) Policy adoption: efforts to obtain government support by bargaining/

    compromise. (p 390)

5) Policy implementation: policy carried out through public programs/ actions. For

    example: IRS to implement income tax law. (p 391)

6) Public evaluation: see if goals are achieved. Evaluate effectiveness of

    programs. (p 391)

B) MODELS of Decision Making:

a) Rational: Issues carefully analyzed. All alternatives considered and evaluated.

    Needs clear objective & all info for thorough analysis. Is difficult to apply in most cases

    due to policy objectives being either too vague or too controversial to come to a clear conclusion. (p. 392)

b) Incremental: more realistic. Decisions are added/subtracted little by little from

    existing policies. Mainly making changes to old policies. (p. 392)

            c) Elite: public policies made from small group of influential leaders with common

                goals. (p. 393)

d) Pluralist: policy as an outcome/influence from pressures from different interest

    groups. (p. 393)

 C) Economic policies:

a) Monetary: Control money supply to control economy. Federal Reserve

    System(Fed) controls monetary($) policy. Has 12 regional banks + Federal

    Reserve Board. Slow economy/spending=Feds will then increase supply

    output. (p. 395)

                        1) Tight: $ circulating low when demand for its use is high. (p. 395)

                                    2) Loose: $ high v. low demand. (p. 395)

b) Fiscal: Control economy by managing government spending and tax rates.

    Example: Raise/lower taxes. (p. 396)

c) T. Jefferson and A. Jackson against central control. (p. 394)

d) Before Civil War: power in Congress moved towards agriculture in South and

    West. Railroad companies were also helped out. (p. 394)

e) After Civil War: power shifted to promote business growth. Regulatory

    agencies developed. (p. 394)

 f) FDR: made programs to promote recovery from Depression. Stabilized

    economy. (p. 394)

            g) Result of Great Depression = government has 2 tasks:

                                    1) Maintain stable prices. (p. 394)

                                    2) Maintain orderly growth of economy. (p. 394)



II) How economy should be managed.

A) Keynesians: pro-government intervention to help economy. (p. 396)

-Employment Act: made national government responsible for maximum 

 production/spending, employment. (p. 396)

B) Monetarist: economists against government intervention. Says it stunts growth. (p. 398)

C) Federal deficits, budget surplus:

a) National debt: money that government owes due to spending more than what it

    had. (p. 399)

1) Surplus: revenues/receipts exceeds spending. More money coming in

    than going out of treasury. (p. 399)

                        2) Deficit: spending greater than revenue. (p. 399)

3) Infrastructure projects: high cost projects to support/enhance

    economy. (p. 400)

4) Entitlements: programs like Social Security that provide funds/ services

    to eligible citizen(had right to benefits). (p. 400)

5) Reasons for debt: Public demands more than willing to pay. People

    holding treasury notes. Government financed spending through

    borrowing instead of through taxes to stimulate economy. (p. 400)

                        6) Belief: Increased national debt = increase inflation(higher prices today

                            than in the past). (p. 401)

                        7) Last decade of 20th century: annual deficit declines. (p. 402)

b) Surplus issues continues in 2000 presidential campaign. (p. 403)

D) Economic Development POLICIES: promoting/protecting businesses to enhance 

 overall economic growth. (p. 403)

a) Tariffs: to tax goods coming in from other countries to protect domestic US

    industries. Often seen as because of Great Depression. (p. 403)

b) Free trade: International economic policy. Ends things like tariffs to allow free

    exchange of goods from other countries. Raised little controversy. (p. 403)

c) Balance of trade: Difference in the value of what Americans buy and sell

    overseas. $ difference in import v. export. (p. 403)

1) Foreign investment greater than US overseas export so government

    proposed tariffs. Administrations against this, wanted other countries to

    decrease their tariffs. (p. 403)

                        2) Clinton: NAFTA: North American Free Trade Agreement. (p. 405)

3) Reagan, Bush, Clinton: pro-free trade. (p. 403)

4) WTO(World Trade Organization) in Seattle, WA: established rules of world

    trade. Hoped other countries would lower barriers against US goods.

    WTO was protested against. (p. 405)

d) Tax Incentives: tax breaks. Was eliminated. Thought to be too costly/excessive

     for economy. (p. 405-406)

e) Industrial policy: to restructure economy. US abandons industries with high

    labor costs that prevented successful competition with other countries. (p. 406)

 f) Supply-side economics: economic policy. Promoting increased goods

    production by helping private businesses. Says helping businesses = increases

    jobs. (p. 406)

E) Economic Regulatory Policies: 

a) Economic regulatory policies: government monitors/controls critical

    industries/sectors of economy. (p. 407)

b) Interstate Commerce Act of 1887: established the ICC(Interstate Commerce

   Commission)- the FIRST regulatory commission. (p. 407)

            c) Regulatory Agencies:

                        1) FDA: protect consumers. (p. 407)

2) FTC(Federal Trade Commission): protect safe marketplace

    competition. (p. 407)

3) FCC(Federal Communications Commission): regulates interstate

    communication. (p. 407)

4) SEC(Securities and Exchange Commission): oversees business

    activities in securities and investment markets. (p. 407)           

5) FERC(Federal Energy Regulatory Commission): regulate interstate

    energy production/distribution of electric power & natural gas. (p. 407)

6) NLRB(National Labor Relations Board): regulate workplace

    relations(businesses v. employees). (p. 407)

            d) Antitrust laws: to promote economic competition. (p. 407)

For example:

1) Sherman Antitrust Act: business restraining trade & monopoly of

    market for  product/service =  is illegal. (p. 407)

2) Clayton Antitrust Act: outlaws monopoly, & actions that decrease

    competition. (p. 407)

                        3) Microsoft ruled as a monopoly. (p. 408)

e) Under Carter and Reagan: restrictions of gas producers lowered. Economic

    DEREGULATION occurred. (p. 408)



III) Social Policies: based on -->

-England's poor laws: local communities responsible for caring for their own sick/needy. (p. 408)

            -grant in aid programs: used for limited purpose w/specific rules. (p. 409)

-National government not actively involved in social policy until Great Depression. (p. 409)


A) Aiding the poor:

a) Personal Responsibility and Work Opportunity Reconciliation Act (G 409):

    welfare reform. (p. 409)

b) OLD WELFARE SYSTEM (p. 409): 3 forms

1) General assistance: emergency help. Cash or food. For example: food

    stamps. (p. 409)

                        2) Work assistance: giving jobs, or training. (p. 409)

3) Categorical assistance: specific population targeted(For example: kids,

    families with dependent kids, disabled).

    Became to costly centralized, inflexible. Poor become too dependent. (p. 409)

            c) NEW WELFARE SYSTEM (p. 410): through 1996 welfare reform

1) More power to states with Congress setting standards:  States have

    right to refuse those who don't want to work. (p. 410)

a) TANF(Temporary Assistance for needy Families):gives state

     "block grant" to replace/change previous federal welfare

      system. Money funds part of Aid to Families with Dependent

      Children(ADDC). (p. 411)

    -Goals: (1) Helps needy, (2) prevents dependence, (3) reduce

      wedlock pregnancies, (4) encourage 2 parent families. (p. 411)

2) Capping Cost of Welfare: open ended funding stopped. TANF

    programs aren't entitlements. Eligibility and benefits can be changed.

    Changeable. (p. 412)

3) SSI(Supplementary Security Income): monthly benefits for

    blind/old/disabled. (p. 412)

4) Food stamps: entitlement program. Food assistance to poor. Tied to

    AFDC. Is still intact. (p. 412)

5) Medicaid: primary program for helping poor. Some helped were

    children, elderly, disabled. (p. 413)

B) Meet Public's General Needs

a) Social insurance programs: by SSA - cover lost income in crisis or loss.

    Funding from taxes. For unemployment, retirement etc. those paying trust fund

    are entitled to benefits.  (p. 414)

            b) Medicare: under SSA - health insurance for elderly/disabled. (p. 415)

c) National Commission on Social Security Reform: deals with financial crisis of

    SSA trust funds. (p. 415)

C) Social Regulations: (p. 417)

a) Social regulations program: to protect against adulterated food & deceptive

    advertising. -> Pure Food/Drug Act & Meat Inspection Act passed. (p. 417)

b) Consumer protection policies: made federal agencies to deal with safety/quality

    of consumer products. Protect consumers. (p. 417)

c) FDA(by Food Safety and Inspection Service of the Department of Agriculture)

    regulates consumer  products. (p. 417)

d) ICC(Interstate Commerce Commission): regulated passenger ground

    transportation. (p. 417)

e) Civil Aeronautics Board: regulated air passenger service. Board currently dead. (p. 417)

f ) Worker protection program: protect worker rights, safety, health, against

    discrimination. (p. 419)

            g) Equal employment opportunity: prohibits discrimination. (p. 419)

h) OSHA: established under Occupational Safety and Health Act. Regulates, on

    site inspection. To reduce safety and health hazards. (p. 420)