I i. -Senator 1990 UNITED STATES GOVERNMENT AND POLITICS

Transcription

1 '1 I i -Senator 1990 UNITED STATES GOVERNMENT AND POLITICS

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7 THINK AS A POLITICAL SCIENTIST: ANALYZE AND INTERPRET A POLITICAL CARTOON ON ENVIRONMENTAL POLICY Political cartoons are one way people express their views. Funny or somber, they shed light on political events, issues or people, and reflect the cartoonist's viewpoint. The artist decides how much of the message is carried by the text and how much by the image. To analyze a political cartoon, study its elements: Who are the people in the cartoon and how are they portrayed? Take note of the cartoon's symbols and labels. How would you describe the artist's style? What is the mood or tone of the cartoon? To interpret a political cartoon, draw inferences: make an educated guess based on the evidence presented and your own knowledge. What meaning can you draw from the cartoon that is not explicitly stated? How is this information presented textually and visually? Finally, when you synthesize information, you pull together the information in a unified and coherent understanding. What is the author's point of view on the topic based on your analysis and the evidence? Practice: Analyze, interpret, and synthesize the cartoon below to fully understand its text and visual information. Then use an online resource to find two more cartoons on the same subject. Compare and contrast how the artists address the issue of environmental policy. In what ways are the cartoons similar and different? Sum up your analysis, interpretation, and comparison in a brief essay. j ":IF ONt.Y we cout.o HARveST THe WINl? COMING our OF THeRe. 'f. Source: Cartoonstock 396 UNiTED STATES GOVERNMENT AND POLITICS

8 Source: Getty President Ronald General William declared it was in a C'U... Alrl""".. traffic controllers, """,,,",VJ.Y''',Uj;;. n',...,.. v"'~i... r"'." which has seen... "l.. "",1."".. u. and air controllers. union was later decertified. "-"~A""""""'1-l but firm stand "",h"~,,.a the world of DOMESTIC POLICY

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12 a promise that the United States will pay them back later with interest. The Fed both sens these to and purchases these from commercial banks. When it buys them back with interest, it is giving the banks more money with which to operate and to loan out to customers. Discount Rate The Fed also sets the discount rate, the interest rate at which the government loans actual dollars to commercial banks. Since 1990, this rate has fluctuated from 4 to 6 percent; more recently it has dropped below 1 percent. Raising or lowering the discount rate has a direct impact on commercial banking activity and the economy in general Commercial banks will borrow larger sums when the rate is lower and drop their interest rates accordingly. When banks can offer lower interest rates to consumers, people purchase more cars and houses. When more homes or cars are purchased, employment rises as more car sales associates, realtors, and housing contractors are needed, and demand is generated for lumber, bricks, rubber, and gasoline. Reserve RequirementlS The Fed also regulates how much cash commercial banks must keep in their vaults. While these banks give you an incentive to keep your money with them by offering small interest rates on savings or checking accounts, they charge higher rates to those borrowing from them. The Fed sets reserve requirements, the amount of money that the bank must keep on hand as a proportion of how much money the bank rightfully possesses (though much of it is loaned out to borrowers). These reserves and this requirement have a direct effect on how much the bank can loan out. If the reserve requirement goes from 16 dollars on hand for every 100 it loans out to 12 on hand, the bank will be encouraged to loan out more. If the reserve requirement rises, the interest rates will also rise. The Fed sets the terms for U.S. bonds and Treasury bills. The Fed can raise or lower the discount rate. The Fed can alter banks' reserve requirement. Independence and Stability As you can see, decisions at the Fed can have monumental impact on the value of the dollar and the state of the economy. That is why the Federal Reserve Board is an independent agency in the executive branch with a unique structural design. Presidents can shape the Fed with appointments, but once confirmed, these governors and the chainnan act in the best interest of the nation, not at the whims of the president or of a political party. Their lengthy, 14-year terms allow for continuity. The chairman's term is a four-year period that staggers the president's term to prevent making the appointment an election issue. The president can remove these governors for stated causes if they are proven to act in poor interest of the nation. No president, however, has ever done so. DOMESTIC POLICY 401

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15 Sou.rce: Senate Committee on Finance, ICX-SI-10. UNITED STATES GOVERNMENT AND POLITICS

16 Source: OMB Historical tables. FY 2011

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20 carries the electrical charge, and no politician wants to touch Social Security because of the shockwave in constituent disapproval Combined, Medicare and Medicaid make up nearly 20 percent of the federal budget. Once a patient is 65 years old, the government pays for most doctor visits, hospitalization, and prescription drugs. Medicare is largely administered by the states while the federal government pays the bill Congress must pay entitlements, but these could be altered. The rules and criteria around them can change to trim the payments to those entitled. And, for the future, some could surely be scrapped. The problem is that most entitlements are on autopilot, and the government need not review them annually. And, like the third rail of Social Security, politicians have little nerve to take away money from those to whom they have given for so long. Discretionary Spending All told, entitlements make up about two-thirds of the federal budget. That leaves the remaining one-third that can be altered, cut, or increased. This discretionary spending parallels the optional spending in the household budget. The vast majority of this wedge of the pie is spent on national defense. With well over one million full-time employees in the Defense Department and countless contractors, the defense budget makes up about one-fifth of the total pie. Wasteful spending is always a concern. In their book Where Does the Money Go? authors Scott Bittle and Jean Johnson offer the top three reasons why money gets thrown away-fraud and abuse, waste, and pork. A recent sampling includes nearly $2 billion in wasted funds allocated for victims of Hurricane Katrina; $100 billion in unused refundable airline tickets for which the Pentagon never sought refunds; Depar1ment of Agriculture credit cards used to purchase concert tickets, tattoos, and lingerie; and nearly 1,000 pork barrel projects that cost $29 billion. HOW FEDERAL REVENUE IS SPENT, DOMEST1C POLICY 409

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23 REFLECT ON "rhe ESSENTIAL QUESTION Essential Question: How does the federal government set and carry out domestic policy? On separate paper, complete,a chart like the one below to gather details to answer that question. TYpes of Pol icy How Each Is Set, with Examples KEY TERMS, NAMES, AND EVENTS Affordable Care Act excise taxes National Labor agenda Fair Labor Standards Relations Board balanced budget Act (1938). North American Free amendment Federal Reserve Board Trade Agreement (NAFTA) bonds fiscal year Occupational Safety Clean Air Act flat tax and Health Act (1970) Clean Water Act Government Office of Management Congressional Budget Accountability Office and Budget (OMS) and Impoundment (GAO) Control Act (1974) pluralist theory Gramm-Rudman-Hollings Congressional Budget Act (1985) progressive tax Office (CSO) House Ways and Means Reaganomics Council of Economic Committee sequester Advisors impoundments Sixteenth Amendment debt Inflation Social Security Act deficit interest group politics (1935) discount rate Internal Revenue Superfund discretionary spending Service (! RS) supply-side' economics Elite Theory mandatory spending surplus entitlements majoritarian politics Taft-Hartley Act (1947) Environmental Medicaid trade balance Protection Agency Medicare (EPA) Monetary policy Wagner Act (1935) estate tax 412 UNITED STATES GOVERNMENT AND POLITICS

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26 Source: Mike Keefe, InToon.com Social Cartoon cartoon DOMESTIC POLICY 5

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