What is the origin of the subprime mortgage crisis?
Loose lending practices, Inaccurate rating of mortgage backed securities, and Declining home prices leading to foreclosure.
First created in 1913 to serve as a central bank. It also serves as the source of borrowing money on behalf of the government.
What is the job of the Federal reserve
Controls the amount of currency in circulation through buying and selling of securities. It also determines interest rates
What assures the independence of the Federal Reserve?
7 directors who serve 14 yr. terms, President cannot move these directors except for cause,and the fed is self financed so it does not require congressional appropriations.
what is the current national debt?
9.6 trillion dollars
What makes deficits seem bad?
They increase interest rates, make you borrow against future income, and the make the government have to pay interest.
How did Bush manage to reduce the overrall tax burden by 1.4 trillion?
He reduced marginal income taxes, repealed the estate tax, and he increased deductions
Critics of the tax cut believe:
Tax cuts gives benefits largely to the wealthy and this will make it harder to pay for medicare, or pretect social security/medicare.
Supporters of the tax cut believe:
tax cuts will foster economic growth, offsetting reductions in the short term. Besides, they feel that the wealthy already pay a lot of income taxes, so its about time they got a tax cut.
Programs designed to protect and meet the social welfare needs of the population
What are some examples of social policy?
income maintence, healthcare, foodstamps, and housing programs
Deserving vs. the Undeserving poor
Public is much more supportive in providing for moer deserving. Examples of deserving poor are veterans, and the elderly. People who choose not to work and take care of themselves are less likely to be supported by others.
What was the framer's view on social policy?
They didn't really have a view. The framers didnt say much about social policy
A program that helps people who are no longer working. This includes retirement benefits, survivor benefits, and disability
Hospital and outpatient medical care. It now also helps with prescriptioned drugs
True or False: social Security is means tested
False. Middle class and wealthy retirees still receive benefits from social security
How is the future looking for social security after 2008?
Bad. The number of retirees are growing because of the baby boomers from 1946, benefits are going to continue to rise, medical costs are going to continue to increase, and the number of people paying into the system will go down.
What are some options fo reforming social security?
"Trust fund" payments (current strategy), partial privitization, cuts in benefits, means testing, increasing retirement age
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