Public Policy and Economic Policy

• Policy Recognition

  • Public recognizes a problem in society

  Policy Formation

  • Legislators study the problem and present it to Congress

  Policy Implementation

  • Policy is assigned to the appropiate agency for implementation

  Policy Evaluation

  • Agency evaluates effectiveness of policy
• Taxing

  • Article 1, Section 8 gives Congress the power to collect taxes
  • Congress created the Internal Revenue Service
• Spending

  • Article 1, Section 7 and Article 1, Section 9 power of the pursse
  • Pres. initiates the buget process in consultation with office of Managment and Budget
  • Congress passes the annual budget in consultation w/ congressional Budget Office
• Progressive Tax

  • An individual's tax rate increases as their income increases
  • Type used currently as federal income tax
• Flat Tax

  • An individual's tax rate is the same as all other individual's regardless of income
• Monetary Policy

  • How the gov. manages the supply and demand of its currency and the value of the dollar
  • Inflation - raising prices and the devaluation of the dollar
  • Federal Reserve System in 1913 - in charge of setting monetary policy
• The Fed Roles:

  • Buying and selling securities or bonds
  • Regulates the reserve requirements
  • Setting interest rates
  • Determiness the rates for gov. bonds
• Entitlements

  • Gov. services promised by law to citizens
  • Citizens must meet eligibility requirements to recieve benefits
  • Spending on entitlements is mandatory spending in the federal budget
• Social Insurance Programs

  • Funded by individuals paying into the program
• Public Assistance Programs

  • Funding by taxpayer dollars
  • Eligibility is means-tested