US Policy Domestic: internal issues – laws, government planning and actions Economic: money issues Foreign: dealing with other nations

The Policy Process

Opening: Immigration What method for enforcing immigration law do you believe would be most effective: holding employers who employ illegal immigrants or other ineligible workers accountable, holding individuals accountable through criminalization, requiring proof of citizenship or legal status for all services, or some other method. Why did you make that choice?

Economic Terms Inflation: prices and wages rise Consumer Price Index (CPI) – measures change in prices over time Recession: economy in bad shape for 2 consecutive quarters Depression: severe recession Unemployment: Those actively looking for job but can’t find one Full employment: 5% unemployment Laissez-faire: government does not get involved with economy Instead of government – have free competition in markets = capitalism Business cycle: Growth and slowdown in economy

Government Involvement Keynesian Economic Theory (Democrats – percolate up: help needy) John Maynard Keynes – Great Depression Government should tax and spend to support the economy Ex: Government spending on infrastructure Supply-Side Economics (Republicans – trickle down: help rich) 1980s – Ronald Reagan - recession Reduce government regulation and cut taxes = businesses produce more products and hire more people Oversupply of products will drive prices down Government will get more taxes from businesses and individuals

Economics and Politics President in office is blamed/credited with economy Federal Reserve System (The Fed): INDEPENDENT regulatory agency the regulates the amount of money in circulation: Board of Governors – 7 people appointed by president Federal Open Market Committee – decides how monetary policy should be carried out Controls money supply Lower interest rates = more borrowing and stimulates businesses and buying Loose – low interest rates Tight – high interest rates (bring down inflation)

Globalization: Economics and the World Companies have outsourced – make products in other countries Issues: Wages of workers overseas, Environmental standards, Lost US jobs Balance of trade is often negative – US imports more than exports 2013: Imports: $2.7 trillion/Imports $2.3 trillion Free Trade: no tariffs or import quotas North American Free Trade Agreement (NAFTA) 1993 – Canada, US, Mexico Central American-Dominican Republic Free Trade Agreement (CAFTA-DR)2005 World Trade Organization (WTO) 1997 – 159 member nations Settle trade disputes