POLS 34102 Lecture Notes - Lecture 16: Environmental Policy, National Environmental Policy Act, Safe Drinking Water Act
29 Jun 2018
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CH 16 OUTLINE
The Goals of Economic Policy
1. Public policy consists of laws, rules, statutes, or edicts that express the government's goals
and provide for rewards and punishments to promote their attainment.
2. At the most basic level, government makes it possible for the economy to function efficiently
by setting the rules for economic exchange and punishing those who violate the rules.
3. Government promotes stable markets by protecting the welfare and property of individuals,
maintaining law and order, enacting laws that protect individuals and businesses in economic
transactions, regulating businesses, and providing public goods.
4. The government may actively intervene in the economy to promote economic growth by
promoting business, investor, and consumer confidence; supporting innovation; and ensuring a
productive and sufficiently large workforce. The federal government also works to reduce
unemployment and keep inflation low as ways to promote economic growth.
5. Government promotes business development indirectly through categorical grants and
supports specific business sectors with direct subsidies, loans, and tax breaks.
6. From the 1930s to the 1980s, the government regulated industrial relations by overseeing
union elections and collective bargaining between labor groups and management. But more
recently, the government has significantly reduced its involvement in industrial relations.
7. The federal government plays an active role in protecting consumers from unsafe products.
The Politics of Economic Policy Making
1. Since the Great Depression of the 1930s, the public has held the government responsible for
maintaining a healthy economy.
2. Politicians disagree about what the priorities of economic policy should be. Both Democrats
and Republicans want to promote economic growth, but Republicans stress the importance of
maintaining economic freedom whereas Democrats are more willing to believe that economic
prosperity requires government action.
3. There are different theories about whether, how much, and in what ways government should
be involved in the economy.
4. Proponents of Keynesianism argue that government can stimulate the economy by increasing
public spending and cutting taxes.
5. Proponents of laissez-faire capitalism argue that the economy will flourish with minimal or no
government interference.
6. Proponents of supply-side economics argue that reducing the government's role in the
economy, particularly through tax cuts, will promote investment and spur economic growth.
7. Because neither party wishes to cut big, expensive, popular programs and because tax
increases have been so difficult to enact, budget deficits have grown and smaller programs have
been cut.
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