PART III ISSUES AND CONTROVERSIES IN PUBLIC POLICY

Background 226

Goals of Economic Policy 228

Economic Growth 229

Low Levels of Unemployment 230

Low Levels of Inflation 232

Positive Balance of Trade 233

Managing Deficits and Debt 234

Interrelationships of Economic Goals 236

Tools of Economic Policy 236

Fiscal Policy 237

Monetary Policy 237

Regulation 238

Incentives, Subsidies, and Support 240

Tax Policy 241

The Budget Process and Its Effect on Economic Policy 243

Assumptions and Planning 244

Agency Budget Development 244

OMB Budget Review 245

Congressional Review 245

Budget Execution and Control 247

Economic Policy: Successes and Failures 247

Significant Income Tax Cuts 248

Responses to the Deficit 249

American Recovery and Reinvestment Act of 2009 251

Economic Issues and Challenges 252

Maintaining Economic Growth 252

Growth of Entitlements 254

Income Inequality 254

Focused Discussion: How to Address the Budgetary Shortfall 256

Economic Issues 258

Political Issues 260

Equity and Other Ethical Issues 262

Conclusions 264

Discussion Questions 266

Keywords 266

Major Legislation 266

Suggested Readings 266

Suggested Websites 267

Notes 267