Economic and Social Welfare Policymaking

2. Economic and Social Welfare Policymaking 16

3. Video: The Big Picture 16 http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/polisci/presidency/Edwards_Ch16_Economic_and_Social_Welfare_Seg1_v2.html

4. 16 Learning Objectives Identify the main policy tools that American government can employ to address economic problems, and contrast Keynesian and supply-side economics 16.1 Compare and contrast entitlement and means-tested social welfare programs 16.2

5. 16 Learning Objectives Assess the extent of economic inequality in America and the role of government in lessening it 16.3 Trace the change over time in major federal welfare programs 16.4

6. 16 Learning Objectives Outline how America’s Social Security program works and the challenge of keeping it financially solvent in the coming years 16.5 Distinguish American social welfare policy from that of other established democracies 16.6

7. 16 Learning Objectives Assess the impact of social welfare policies on democracy and the scope of government in America 16.7

8. Video: The Basics 16 http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/polisci/presidency/Seg2_EconomicPolicy_v2.html

9. 16.1 Economic Policymaking • Two Major Worries: Unemployment and Inflation • Policies for Controlling the Economy • Why It Is Hard to Control the Economy

10. Unemployment rate 10% in Great Recession Underemployment rate Tracked by Bureau of Labor Statistics (BLS) Inflation Rise in price of goods and services Consumer price index (CPI) Averages 4% 16.1 Two Major Worries: Unemployment and Inflation

11. Laissez-faire Monetary policy and the “fed” Federal Reserve Board Meets in secret; not accountable to Congress Manipulating the amount of money 16.1 Policies for Controlling the Economy

12. Fiscal policy: Keynesian v. supply-side economics Taxing, spending, borrowing Keynesian economic theory Supply-side economics 16.1 Policies for Controlling the Economy

13. 16.1 Chairman of the Fed, Ben Bernanke

14. 16.1 FIGURE 16.1: How the Obama administration’s predictions of the impact of the 2009 stimulus plan went awry

15. Video: Thinking Like a Political Scientist 16.1 http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/polisci/presidency/Seg4_EconomicPolicy_v2.html

16. “Political business cycle” Presidents control economy to win elections Private sector dominates economy Federal government is ¼ of GDP Impact of government policies gradual 16.1 Why It Is Hard to Control the Economy

17. 16.1 16.1Laissez-faire economic theory holds that government intervention in the economy: • Is needed during recessions and depressions • Is key to preventing inflation • Is detrimental to economic growth and prosperity • Is necessary only when interest rates are too high

18. 16.1 16.1Laissez-faire economic theory holds that government intervention in the economy: • Is needed during recessions and depressions • Is key to preventing inflation • Is detrimental to economic growth and prosperity • Is necessary only when interest rates are too high

19. Video: In Context 16.1 http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/polisci/presidency/Seg3_EconomicPolicy_v2.html

20. 16.2 Types of Social Welfare Policies • Biggest government expense • Only 17% goes to poor

21. 16.2 Types of Social Welfare Policies • Entitlement programs • Social Security, Medicare • Largest and most expensive

22. 16.2 Types of Social Welfare Policies • Means-tested programs • Food stamps, Medicaid • Fear of dependency

23. 16.2 16.2Which of the following is an example of an entitlement program? • Food stamps • Medicaid • Postal service • Medicare

24. 16.2 16.2Which of the following is an example of an entitlement program? • Food stamps • Medicaid • Postal service • Medicare

25. Explore the Simulation: You Are the Federal Reserve Chair 16.2 http://media.pearsoncmg.com/long/long_longman_media_1/2013_mpsl_sim/simulation.html?simulaURL=18

26. Explore Economic Policy: Who Broke the Economy? 16.2 http://media.pearsoncmg.com/long/long_edwards_mpslgia_16/pex/pex16.html

27. 16.3 Income, Poverty, and Public Policy • Who’s Getting What? • Who’s Poor in America? • How Public Policy Affects Income

28. 16.3 99%

29. Income distribution Sense of justice and equality in a democracy Relative deprivation increasing Wealth versus income Income is amount collected in given time Wealth is value of assets 1/3 of wealth held by 1% 1/3 held by 90% 16.3 Who’s Getting What?

30. 16.3 FIGURE 16.2: Increase in income inequality and the rise of the top 1%

31. Poverty line $11,139 in 2010 46.6 million Americans poor in 2010 15.2% of population Demographics of poverty Feminization of poverty 16.3 Who’s Poor in America?

32. 16.3 If landmass were divided like wealth

33. 16.3 FIGURE 16.3: Poverty rates for persons with selected characteristics, 2010: A comparison of the official and supplemental measures

34. Taxation Progressive Proportional Regressive 16.3 How Public Policy Affects Income

35. Government Expenditures Transfer payments Social security, unemployment benefits, food stamps, etc. 16.3 How Public Policy Affects Income

36. 16.3 EBT at the farmers’ market

37. 16.3 TABLE 16.1: The major social welfare programs

38. 16.3 16.3What percentage of Americans live below the poverty line? • 5.3% • 10% • 15.2% • 25.6%

39. 16.3 16.3What percentage of Americans live below the poverty line? • 5.3% • 10% • 15.2% • 25.6%

40. Video: In the Real World 16.3 http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MEDIA_1/polisci/presidency/Seg5_EconomicPolicy_v2.html

41. 16.4 Helping the Poor? Social Policy and the Needy • “Welfare” as We Knew It • Ending Welfare as We Knew It: The Welfare Reform of 1996

42. FDR’s New Deal programs Social Security Act of 1935 AFDC Johnson’s War on Poverty Food stamps 16.4 “Welfare” as We Knew It

43. Republican’s war on dependency “Welfare queens” Deadbeat dads The undeserving poor/African Americans 16.4 “Welfare” as We Knew It

44. Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) States would run their own programs Two year limit for benefits Lifetime maximum of 5 years From AFDC to TANF Reforms were effective Benefit dollar amounts declined Number of recipients declined 16.4 Ending Welfare as We Knew It: The Welfare Reform of 1996

45. 16.4 Climb Wyoming

46. 16.4 FIGURE 16.4: How welfare reform drastically reduced the welfare rolls

47. 16.4 16.4Which of the following was a goal of welfare reform? • Reduce the number of people living in poverty • Reduce the number of children who lack medical insurance • Reduce the number of people receiving welfare benefits • Reduce the need for job training to get people off welfare

48. 16.4 16.4Which of the following was a goal of welfare reform? • Reduce the number of people living in poverty • Reduce the number of children who lack medical insurance • Reduce the number of people receiving welfare benefits • Reduce the need for job training to get people off welfare

49. 16.5 Social Security: Living on Borrowed Time • Growth of Social Security • Reforming Social Security

50. Popular program Modest benefits Average $1,229/month Most expensive public policy But fiscally sound Surplus depleting since 2010 What is the solution? 16.5 Growth of Social Security