American Government Unit VII Assessment

PS 1010, American Government 1

Learning Objectives Upon completion of this unit, students should be able to:

1. Perceive how the United States government regulates the economy. 2. Explain how the government serves to protect the environment. 3. Identify issues that impact the economic policy, including complex

situations between business and labor. 4. Describe how the federal government uses monetary policy to manage

the economy. 5. Discuss the various programs that are in place to assist those at

poverty level in the United States. 6. Explain the perceptions many Americans have in regards to social

welfare. 7. Elaborate on how education can be seen as “equality of opportunity.” 8. Contrast the American way of promoting economic security with the

European way.

Unit Lesson Prior to the collapse of the economy in 1929 and the slide into the Great Depression, it was up to individual states to take care of those who were having economic problems. States themselves had few social welfare

programs, and it was seen as an issue for charities and families to take care of. Herbert Hoover was noted for his unwillingness to help the people and telling them to “pull themselves up by their boot straps.” The impact of the Great Depression was such that the people needed more, and Franklin D. Roosevelt gave it to them in the form of the New Deal Programs. Before the New Deal, the government dealt mostly in laissez- faire economics, believing that businesses should make all production and distribution decisions. The government did, however, take part in big business through such things as the Pacific Railways Act of 1862, by regulating

the hours of women and children workers, and instituting worker safety rules. After the New Deal, the federal government would enact more regulations to try to gain more control over big business.

Franklin Delano Roosevelt (Goldensky, 1933)

Reading Assignments Chapter 15: Economic and Environmental Policy: Contributing to Prosperity Chapter 16: Welfare and Education Policy: Providing for Personal Security and Need

Supplemental Reading Click here to view a PDF of the Chapter 15 presentation. Click here to view a PDF of the Chapter 16 presentation.

Key Terms 1. Balanced budget 2. Budget deficit/surplus 3. Capital-gains tax 4. Deregulation 5. Economic

depression/recession 6. Entitlement programs 7. Fiscal policy 8. Inflation 9. Laissez-faire doctrine

10. Means test 11. National debt 12. Poverty line 13. Regulation 14. Social insurance

programs 15. Supply-side

economics

UNIT VII STUDY GUIDE

Economic, Environmental, and Education Policies

PS 1010, American Government 2

The federal government believes in promoting efficiency and equity in big business today. The Interstate Commerce Act was enacted in 1887 to regulate shipping. Later, Teddy Roosevelt and others would work hard to break up monopolies in the market place. The government still watches mergers within the market place to keep companies from creating monopolies. The AT&T phone company, also known as Ma Bell, controlled the telephone industry until the 1974 antitrust filing, which would break it up beginning in 1982. Because of this we now have AT&T, Sprint, T-Mobile, and various other phone companies. While the government believed that some companies needed to be more heavily regulated, they also began the deregulation of other companies. Although deregulation of airlines made them more competitive, deregulation of the banking system made it more reckless. Due to the lack of regulation in the banking system, we would eventually see a financial downward spiral, beginning in 2008 that would rock the financial world. Efficiency in big business is one part of the puzzle, and equity is the other. In order for equity to occur the transaction must be fair to both sides. The FDA (Food and Drug Administration) and the Consumer Product Safety Commission would be brought into play to help keep the consumer safe from the products big business was selling without testing. Where there are big business concerns, there are also environmental concerns. In the nineteenth and early twentieth centuries, there was a lack of care for the environment. Business was booming, money was being made, and no one thought about what was happening to the bi-products. Pesticides being used on crops were running off into the water supply and killing animals such as the American Bald Eagle, as well as increasing cancer in the human population. The 1960s and 1970s would see the creation of the EPA (Environmental Protection Agency) as well as the Clean Air and Water Quality Acts. Earth Day was conceived in 1970 and is celebrated every year all over the world. A big worry for the world today is “global warming.” Some believe that the heat trapped in the atmosphere creates a “greenhouse effect” which is increasing the temperature levels around the globe. Others believe that this is just part of the earth’s cycle and has happened many times before. While many industrialized nations are attempting to control or reduce their “carbon footprints,” the rapid expansion of developing nations has increased carbon emissions. How the cost of “going green” will be shared is a major sticking point of any agreement that might be made among nations. What runs fiscal policy? Is it demand or supply? John Maynard Keynes believes that if goods and services are being purchased, then companies will keep their employees and continue to hire (demand-side economics). According to this theory, if the economy begins to slump, it is up to the government to pump money into the economy so that the depression or recession will shorten. On the supply side of the aisle, it is believed that instead of the government spending massive amounts of money to jump start the economy, tax breaks should be given to businesses and upper-income individuals. These tax breaks are supposed to be incentives for business and the wealthy to invest in business and increase employment and wages. It is thought that this will keep consumers spending and increase economic growth. This form of economic thinking became known as Reaganomics after President Ronald Reagan. According to the Tenth Amendment to the Constitution, social welfare was considered a state power. Another aspect of FDR’s New Deal and later Lyndon Johnson’s (LBJ) Great Society was an increase in the federal government’s

PS 1010, American Government 3

involvement in social welfare and education. As with everything else political, while the Republicans believe that the federal government should only play a small part, the Democrats believe that the federal government’s part should be expanded. Of the many social insurance or public assistance programs out there, few programs are fully funded by the federal government. Most are partly funded by the federal government by grants given to the states, which then add their money to the mix. Social insurance programs are programs such as Social Security, which working people pay into in order to receive money back at a later date. Public assistance programs on the other hand are programs such as TANF (Temporary Assistance for Needy Families) funded through tax dollars and available only to the financially needy. Education in America is essentially standardized across the board (English, math, science, history) but has never been the same from place to place. The Supreme Court ruled while all children must be given and “adequate” education, they do not have to be given an “equal” one. Many state courts on the other hand have ruled that schools must have equal funding throughout the state. Due to the lagging behind of American students in math and science, mandatory high-stakes testing was implemented with the passing of No Child Left Behind. Some of the other tools used in NCLB include taking over or closing poorly performing schools as well as giving vouchers for students of those schools to attend private or parochial schools or better performing public schools. Charter schools, which do not have to follow the same rules as public schools, have also been opened in many areas. In 2009, President Obama started a program called “Race to the Top”, which rewards states for school performance and innovation. Compared to other democracies, the United States has a high level of income inequality but does try to make sure all of its children are equally educated.

Reference Goldensky, E. (1933). FDR in 1933 [Photograph]. Retrieved from

http://commons.wikimedia.org/wiki/File:FDR_in_1933.jpg Patterson, T. (2013). The American democracy (11th ed.). New York, NY:

McGraw-Hill, Inc. Souza, P. (2012, December 6). President Barack Obama [Photograph].

Retrieved from http://commons.wikimedia.org/wiki/File:President_ Barack_Obama.jpg.

Barack Obama (Souza, 2012)