Presentation on theme: "ECONOMIC POLICYMAKING. Who controls the Economy today? The President AND Congress!"— Presentation transcript:
Who controls the Economy today? The President AND Congress!
The Federal Economy The PresidentThe Congress 1921 Budget & 1921- Congress hands over Accounting Actthe reigns to the President to prepare the budget CEA- Council of Economic Advisors (3 members) OMB- Congressional Budget Office of Management & Budget & Impoundment Act 1974 (over 500 workers) CBO- Congressional Budget Office
Market vs. Non Market Economies
ADAM SMITH Government keep your hands out of Business! ADAM SMITH
JOHN MAYNARD KEYNES We can control the Economy! Aggregate Demand can be controlled through Monetary and Fiscal means.
The Federal Reserve Established 1913 7 Members all appointed by the president in office 14 yr. Tenure Federal Chairman BEN BERNANKE
TAXES WE PAY Property- pays for education, police, and fire protection Excise- ex: gasoline tax Personal- tax on your income Sales Tax- State and Local OH= 6% Geauga County- 6.5% Cuyahoga County- 7.5%
TAXES WE PAY Payroll Taxes- Social Security, Medicare etc. Licenses- Social Insurance- Social Security User Fees- turnpike tolls
Figure 18.2 Federal Spending in 2011, by Function 17
TARP Troubled Asset Relief Programs Passed in 2008 by President Bush
American Recovery and Reinvestment ActAmerican Recovery and Reinvestment Act (ARRA) 2009 February 13 ARRA was passed by both the House and Senate. Originally intended to be a bipartisan bill, the passage of the bill was largely along party lines. No Republicans voted for it in the House & three moderate Republicans voted for it in the Senate Collins and Snowe of Maine and Specter of PA. The bill combined TAX BREAKS with spending on INFRASTRUCTURE Projects, extension of welfare benefits, and education. The final cost of the bill was $787 billion, and almost $1.2 trillion with debt service included. President Obama signed the Act into law on February 17, 2009.