HUSTON-AP US GOVT CHAP 18

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AAA: Agricultural Adjustment Act II 1938- - provides subsidies to farmers raising crops such as corn, cotton, and wheat who grew no more than their allotted acreage (upheld by supreme court as appropriate exercise of congress power to regulate intersate commerce)
balanced budget amendment: Proposed amendment to require a balanced budge every year, never passed
budgetary deficit: The amount of debt a country is in, has been growing since the 1960's. Known for the negative impact they may have on economies but Keynesian ecomomics has some people see a value to deficits and justify them as a means of stimulating ecomomic growth in periods of decline.
budgetary process: Congress first recieves the president's budget, then the Congressional Budget Office reports to the budget committees, committes submit their views on the budget, budget committees report a concurrent resolution on the budget wheich acts as an adgenda for the remainder of the process, then the annual appropriations bills may be considered in the house, House Appropriats Committee completes action on regual appropriations then Congress completes action on reconciliation legilation then the HOuse completes action an all appropriation bills then the new fiscal year begins again on October 1.
budgetary surplus: When there is more money accounted for in the budget then is actually used. Was one in 1998 under Clinton
business cycles: Fluctuation between expansion and recession that is a part of modern capitalist economies- boom and bust
CAB: The Civil Aeronautics Board which was eliminated during the Airline Deregualtion Act of 1978 because it regulated commerical airlines economically. This was done because the government felt that competition between airlines would be in the best interest of the consumer.
CEA: Council of Economic Advisors that advises the President on economic issures
Consumer Products Safety Commission: An example of social regulation because it regulate product safety.
deficit reduction legislation: Budget surpluses after 1998 came as a consequence of hard decisions and key congressional acts. The Gramm-Rudman-Hollings Act, the Budget Enforcement Act of 1990, and the Omnibus Budget Reconciliation Act of 1993 influenced future budgets by turning around the environment for budgeting from endless deficits to surpluses. The Balanced Budget and Emergency Deficit Reduction Act was created to automatically reduce the deficit. This act is better known as the Gramm-Rudman-Hollings Act, and it has three major components; Budget deficit goals of 171.9 billion and 144 billion were set for 1986 and 1987. Various programs were exempted from automatic budget cuts, including Social Security, Medicaid, and food stamps. If the deficit target was not met at the beginning of the fiscal year, then by a process of sequestration, automatic, across-the-board budget cuts, divided equally between nonexempt domestic nad military programs would be levied. The initial deficit reduction effort was not very successful, but it represented an early attack on the deficit and lead the way for other initiatives.
deregulaion: Deregulation involves the reduction in market controls like controls on allowable rates or who can enter the field. In theory, deregulation would increase market competition and lead to lower prices for consumers. The focus of this movement was on the economic regulatory programs for industries such as railroads, motor carriers, and commercial air transportation. In the 1950s and 1960s, people began to point out the defects in some of the economic regulatory programs such as monopoly profits, discrimination in services, and inefficency in the operation of regulated industries. Regulation made it difficult for industries to compete and discouraged new competitors. In the mid 1970s, Ford made deregulation a focal part of his administration. Only one deregulation act was passed during his administration, but it picked up momentum as Carter became president. Various pieces of legislation that deregulated commercial airlines, railroads, and motor carriers were passed during his term.
discount rate: The rate of interest at which member banks can borrow money from their regional Federal Reserve Bank. Lowering the discount rate would encourage local member banks to increase their borrowing from the Federal Reserve Bank and extend more loans at lower rates. This would expand economic activity.
economic regulation: Governmental regulation of business practices, industry rates, routes, or areas serviced by particular industries.
environmental policy making: Government operating through the policy process is responsible for pollution control. The market is unable to deal with the problem of environmental pollution because pollution is an externality or socail cost of industrial activity. In the nature of things, air and water are free or public goods, and therefore industries can dispose of wastes at low costs by emitting them into the air or dumping them into nearby lakes. The costs of waste disposal are borne by the people affected by the waste. A business has no incentive to clean up its pollutants because it would drive up its expenses. Groups supporting environmental protection have greatly increased in number and technical skill. These groups have been major forces in pushing Congress to enact new environmental legislation and to strengthen existing laws. During the Reagan administration, environmental groups thrived. Since 1970, Congress has enacted pollution control legislation to clean up the nation's air and water and to regulate the disposal hazardous and toxic wastes.
FTC: The Federal Trade Commison created to protect small businesses and the public from unfair competition, especially from big business.
GDP: Gross domestic product: The total market value of all goods and service produced in a country during a year.
globalization: The effect of international affairs playing a mojor role in U.S. business decisions of companies that wish to maximize their profits from reducing labor costs as well as expanding their markets.
ICC: UN court that has jurisdiction over crimes against humanity, war crimes, and genocide. US has never signed the treaty and is not part of the court.
inflation: a rise in the general price levels within an economy
interventionist state: step after the laissez-faire attitude; involves a more active government role
investment income: income from a portfolio of invested assets; achieved when countryÂ’s economy is stable enough so that consumers will invest money in stocks (long-range trust in the government and stability of the country)
John Maynard Keynes: English philosopher/political scientist whose general theory dealt with employment, interest, and money; believed that the economy would not balance itself and that the government should stimulate spending by using deficit funding
laissez-faire: hands-off policy of government; government should not try to regulate economy which will in turn promote freedom and economic growth
monetary policy: A form of government regulation in which the nation's money supply and interest rates are controlled.
money: A system of exchange for goods and services that includes currency, coins, and bank deposits.
open market operations: The buying and selling of governement securities by the Federal Reserve Bank in the securities market.
OSHA: Occupational Safety and Health Administration. One of the Independant agencies and Governmental Corporations. Created to assure the safety and health of America's workers by setting and enforcing standards; providing training, outreach, and education; establishing partnerships; and encouraging continual process improvement in workplace safety and health.
recession: A short term decline in the economy that occurs as investment sags, production dalls off, and unemployment increases.
reserve requirements: Governmental requirements that a portion of member banks' deposits must be retained to back loans made.
Sherman Antitrust Act: Passed in 1890, the Sherman Antitrust Act prohibits all restraints of trade, all monopolization, and all attempts to monopolize an industry. This act was a response to the growing scope and power of monopolies in all sectors of American industry.
social regulation: Governmental regulation of the quality and safety of products as well as the conditions under which goods and services are produced.
Taft-Hartley Act: A cut to labor union power, the Act sought to increase the power of management in collective bargaining by imposing a variety of restraints on labor unions while also strengthening the management prerogatives. It put a tight reign on unions by forbidding them from having jurisdictional strikes and demanding that they submit reports on their finances and procedures to the Department of Labor. Furthermore, government officials were forbidden to strike. The closed shop arrangement, in which a businessman agrees to hire only union workers, was banned. As a result of all of these things, the Taft-Hartley Act was often refered to as the "slave labor" act.
tax cuts: Often used during a time of recession to boost the economy; depending on whether the government finds the consumers or the producers most likely to stimulate the economy, tax cuts will be issued for those people. The Democrats believe that tax cuts should be directed towards the consumers because they will spend the extra money, thereby jumpstarting the economy. The Republicans believe that the tax cuts should be directed towards businesses because then new businesses will start and create jobs.
wage income
Wagner Act: Also called the National Labor Relations Act of 1935, it gave workers involved in interstate commerce the right to organize labor unions and engage in collective bargaining and prevented employers from discriminating against labor leaders and taking action against union leaders.

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