1. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved

2. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16 Economic and Social Welfare Policymaking Kevork Djansezian/Getty Images News/Getty Images

3. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16 Learning Objectives 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. 16.1 16.2

4. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16 Learning Objectives Assess the extent of economic inequality in America and the role of government in lessening it. Trace the change over time in major federal welfare programs. 16.3 16.4

5. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16 Learning Objectives 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. 16.5 16.6

6. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16 Learning Objectives Assess the impact of social welfare policies on democracy and the scope of government in America. 16.7

7. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Two Major Worries: Unemployment and Inflation  Policies for Controlling the Economy  Why It Is Hard to Control the Economy 16.1 Economic Policymaking

8. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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

9. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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

10. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Fiscal policy: Keynesian v. supply-side economics Taxing, spending, borrowing Keynesian economic theory Supply-side economics 16.1 Policies for Controlling the Economy

11. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.1 Chairman of the Fed, Janet Yellen Bloomberg/Getty Images

12. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.1 FIGURE 16.1 How the Obama administration's predictions of the impact of the 2009 stimulus plan went awry

13. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  "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

14. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

15. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Biggest government expense  Only 17% goes to poor 16.2 Types of Social Welfare Policies

17. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Entitlement programs Social Security, Medicare Largest and most expensive 16.2 Types of Social Welfare Policies

18. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Means-tested programs Food stamps, Medicaid Fear of dependency 16.2 Types of Social Welfare Policies

19. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

20. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

21. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Who's Getting What?  Who's Poor in America?  How Public Policy Affects Income 16.3 Income, Poverty, and Public Policy

22. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 99% Chip Somodevilla/Getty Images News/Getty Images

23. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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?

24. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 FIGURE 16.2 Increase in income inequality and the rise of the top 1%

25. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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?

26. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 If landmass were divided like wealth

27. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 FIGURE 16.3 Poverty rates for persons with selected characteristics: A comparison of the official and supplemental measures

28. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Taxation Progressive Proportional Regressive 16.3 How Public Policy Affects Income

29. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Government Expenditures Transfer payments Social security, unemployment benefits, food stamps, etc. 16.3 How Public Policy Affects Income

30. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 EBT at the farmers' market Rich Pedroncelli/AP Images

31. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 TABLE 16.1 The major social welfare programs

32. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 16.3 What percentage of Americans live below the poverty line? a.5.3% b.10% c.15.2% d.25.6%

33. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.3 16.3 What percentage of Americans live below the poverty line? a.5.3% b.10% c.15.2% d.25.6%

34. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  "Welfare" as We Knew It  Ending Welfare as We Knew It: The Welfare Reform of 1996 16.4 Helping the Poor? Social Policy and the Needy

35. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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

36. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Republican's war on dependency "Welfare queens" Deadbeat dads The undeserving poor/African Americans 16.4 "Welfare" as We Knew It

37. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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

38. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.4 Climb Wyoming Carmel Zucker/The New York Times/Redux

39. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.4 FIGURE 16.4: How welfare reform drastically reduced the welfare rolls

40. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

41. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

42. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  The Growth of Social Security  Reforming Social Security 16.5 Social Security: Living on Borrowed Time

43. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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

44. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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 Reforming Social Security

45. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

46. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

47. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  The European welfare state  Taxes and benefits  Individual v. government responsibility 16.6 Social Welfare Policy Elsewhere

48. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

49. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

50. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Democracy and Economic and Social Welfare Policies  Economic and Social Welfare Policies and the Scope of Government 16.7 Understanding Economic and Social Welfare Policymaking

51. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  Problems of free enterprise addressed via democracy Government regulation demanded Limits to economic freedom  Groups unequal in political resources Policy inertia 16.7 Democracy and Economic and Social Welfare Policies

52. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 16.7 Child labor Lewis W. Hine/Archive Photos/Getty Images

53. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved  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 Economic and Social Welfare Policies and the Scope of Government

54. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

55. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved 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

56. Copyright © 2016, 2014, 2011 by Pearson Education, Inc. All Rights Reserved Discussion Questions 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