Economic and Social
Welfare Policymaking
16
Video: The Big Picture
16
http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MED
IA_1/polisci/presidency/Edwards_Ch16_Economic_and_So
cial_Welfare_Seg1_v2.html
Learning Objectives
16.1
16.2
16
Identify the main policy tools that
American government can employ to
address economic problems, and
contrast Keynesian and supply-side
economics
Compare and contrast entitlement
and means-tested social welfare
programs
Learning Objectives
16
16.3
Assess the extent of economic
inequality in America and the role of
government in lessening it
16.4
Trace the change over time in major
federal welfare programs
Learning Objectives
16.5
16.6
16
Outline how America’s Social
Security program works and the
challenge of keeping it financially
solvent in the coming years
Distinguish American social welfare
policy from that of other established
democracies
Learning Objectives
16.7
16
Assess the impact of social welfare
policies on democracy and the scope
of government in America
Video: The Basics
16
http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MED
IA_1/polisci/presidency/Seg2_EconomicPolicy_v2.html
Economic Policymaking
 Two Major Worries: Unemployment and
Inflation
 Policies for Controlling the Economy
 Why It Is Hard to Control the Economy
16.1
Two Major Worries:
Unemployment and Inflation
 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
Policies for Controlling the
Economy
 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
 Fiscal policy: Keynesian v. supply-side
economics
 Taxing, spending, borrowing
 Keynesian economic theory
 Supply-side economics
16.1
Chairman of the Fed, Ben Bernanke
16.1
FIGURE 16.1: How the Obama
administration’s predictions of the impact of
the 2009 stimulus plan went awry
16.1
Video: Thinking Like a
Political Scientist
16.1
http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MED
IA_1/polisci/presidency/Seg4_EconomicPolicy_v2.html
Why It Is Hard to Control the
Economy
 “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
16.1 Laissez-faire economic theory
holds that government intervention in
the economy:
a. Is needed during recessions and
depressions
b. Is key to preventing inflation
c. Is detrimental to economic growth and
prosperity
d. Is necessary only when interest rates
are too high
16.1
16.1 Laissez-faire economic theory
holds that government intervention in
the economy:
a. Is needed during recessions and
depressions
b. Is key to preventing inflation
c. Is detrimental to economic growth and
prosperity
d. Is necessary only when interest rates
are too high
16.1
Video: In Context
16.1
http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MED
IA_1/polisci/presidency/Seg3_EconomicPolicy_v2.html
Types of Social Welfare
Policies
 Biggest government expense
 Only 17% goes to poor
16.2
Types of Social Welfare
Policies
 Entitlement programs
 Social Security, Medicare
 Largest and most expensive
16.2
Types of Social Welfare
Policies
 Means-tested programs
 Food stamps, Medicaid
 Fear of dependency
16.2
16.2 Which of the following is an
example of an entitlement program?
a. Food stamps
b. Medicaid
c. Postal service
d. Medicare
16.2
16.2 Which of the following is an
example of an entitlement program?
a. Food stamps
b. Medicaid
c. Postal service
d. Medicare
16.2
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
Explore Economic Policy: Who
Broke the Economy?
16.2
http://media.pearsoncmg.com/long/long_edwards_mpslgi
a_16/pex/pex16.html
Income, Poverty, and Public
Policy
 Who’s Getting What?
 Who’s Poor in America?
 How Public Policy Affects Income
16.3
99%
16.3
Who’s Getting What?
 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
FIGURE 16.2: Increase in income inequality
and the rise of the top 1%
16.3
Who’s Poor in America?
 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
If landmass were divided like wealth
16.3
FIGURE 16.3: Poverty rates for persons with
selected characteristics, 2010: A
comparison of the official and supplemental
measures
16.3
How Public Policy Affects
Income
 Taxation
 Progressive
 Proportional
 Regressive
16.3
How Public Policy Affects
Income
16.3
 Government Expenditures
 Transfer payments
 Social security, unemployment benefits, food stamps, etc.
EBT at the farmers’ market
16.3
TABLE 16.1: The major social welfare
programs
16.3
16.3 What percentage of Americans
live below the poverty line?
a. 5.3%
b. 10%
c. 15.2%
d. 25.6%
16.3
16.3 What percentage of Americans
live below the poverty line?
a. 5.3%
b. 10%
c. 15.2%
d. 25.6%
16.3
Video: In the Real World
16.3
http://media.pearsoncmg.com/ph/hss/SSA_SHARED_MED
IA_1/polisci/presidency/Seg5_EconomicPolicy_v2.html
Helping the Poor? Social
Policy and the Needy
 “Welfare” as We Knew It
 Ending Welfare as We Knew It: The
Welfare Reform of 1996
16.4
“Welfare” as We Knew It
 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
 Republican’s war on dependency
 “Welfare queens”
 Deadbeat dads
 The undeserving poor/African Americans
16.4
Ending Welfare as We Knew It:
The Welfare Reform of 1996
16.4
 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
Climb Wyoming
16.4
FIGURE 16.4: How welfare reform
drastically reduced the welfare rolls
16.4
16.4 Which of the following was a
goal of welfare reform?
a. Reduce the number of people living in
poverty
b. Reduce the number of children who lack
medical insurance
c. Reduce the number of people receiving
welfare benefits
d. Reduce the need for job training to get
people off welfare
16.4
16.4 Which of the following was a
goal of welfare reform?
a. Reduce the number of people living in
poverty
b. Reduce the number of children who lack
medical insurance
c. Reduce the number of people receiving
welfare benefits
d. Reduce the need for job training to get
people off welfare
16.4
Social Security: Living on
Borrowed Time
 Growth of Social Security
 Reforming Social Security
16.5
Growth of Social Security
 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
Reforming Social Security
 Politically difficult
 Older Americans have high voting rate
 Reform proposals
 Bush: Put 1/3 into private investments
 Obama:




Increase age to receive benefits
Lower inflation raises
Reduce benefits for wealthy recipients
Raise contribution amounts
16.5
16.5 Which of the following was a
Social Security reform proposed by
President Bush?
a. Lower age to receive benefits
b. Increase contributions
c. Raise age to receive benefits
d. Divert funds to stock market
16.5
16.5 Which of the following was a
Social Security reform proposed by
President Bush?
a. Lower age to receive benefits
b. Increase contributions
c. Raise age to receive benefits
d. Divert funds to stock market
16.5
Social Welfare Policy
Elsewhere
 The European welfare state
 Taxes and benefits
 Individual v. government responsibility
16.6
16.6 What is the main difference in
the American and European attitudes
toward poverty?
a. Americans believe poverty is your own
fault
b. Europeans believe poverty is a result of
circumstances beyond your control
c. Both A & B
d. Neither A nor B
16.6
16.6 What is the main difference in
the American and European attitudes
toward poverty?
a. Americans believe poverty is your own
fault
b. Europeans believe poverty is a result of
circumstances beyond your control
c. Both A & B
d. Neither A nor B
16.6
Understanding Economic and
Social Welfare Policymaking
16.7
 Democracy and Economic and Social
Welfare Policies
 Economic and Social Welfare Policies and
the Scope of Government
Democracy and Economic
and Social Welfare Policies
 Problems of free enterprise addressed
via democracy
 Government regulation demanded
 Limits to economic freedom
 Groups unequal in political resources
 Policy inertia
16.7
Child labor
16.7
Economic and Social Welfare
Policies and the Scope of
Government
 Liberals and conservatives disagree
 Liberals advocate more govt. intervention
 Conservatives want less
 Welfare state too big or too small?
 Depends which side you are on
16.7
16.7 The viewpoint that the welfare
state is too large and serves an
undeserving clientele is likely to be
espoused by:
a. A liberal
b. A conservative
c. Both
d. Neither
16.7
16.7 The viewpoint that the welfare
state is too large and serves an
undeserving clientele is likely to be
espoused by:
a. A liberal
b. A conservative
c. Both
d. Neither
16.7
Discussion Question
What tools does the government possess
to intervene in the economy? Who wields
these tools and how effective are they in
improving economic growth? Why do
conservatives and liberals disagree about
social welfare policy?
16
Video: So What?
16
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IA_1/polisci/presidency/Edwards_Ch16_Economic_and_So
cial_Welfare_Seg6_v2.html
Further Review:
On MyPoliSciLab
 Listen to the Chapter
 Study and Review the Flashcards
 Study and Review the Practice Tests
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