POSI Test #2
Between which two nations does the largest trade imbalance in the world exist?
U.S and China
What are the top three nations in the world in dollar amounts in imports and exports?
U.S, China, and Germany
What is the definition of poverty? What government entity is responsible for defining it?
U.S. Bureau of the Census puts number of poor at 12.7% of the population ($12,060 single adult, $24,600 for family of four)
Flat
taxes that require all income groups to pay the same percentage of their income in taxes.
What is debt?
the cumulative total amout of money owed due to yearly operating deficits.
Has the percentage of people without health insurance reduce?
yes
What percentage of people living in the US, prior to Obamacare, did not have healthcare insurance?
~16%
What are some of the arguments given for a flat tax? A National sales tax?
- simplicity - penalizes spending and encourages saving-gets at the "underground" economy - encourages activities that produce income: working, investment, starting businesses
What are some of the leading causes of death in the US?
-Heart Disease -Cancer -Accidents Obesity - United States
What are some the benefits to greater international trade for the United States? Some of the disadvantages?
-Increase on aggregate income and investment -jobs lost -forcing other states hands, other countries are finding benefits in regional trade agreements
Burwell v. Hobby Lobby (2014): Which test did the Court use?
Allowed closely held, for-profit corporations to be exempt from a law its owners religiously object to if there is a less restrictive means of furthering the law's interest "Compelling interest test".
What are some of the major provisions of the tax bill that was recently became law?
- increase on child tax credits- cap on state or local tax deductions- reduction in corporate taxes (35% to 21%)- elimination of the individual mandate (Obamacare) - reduction in income taxes
What is defensive medicine?
Dr's perform procedures that aren't medically necessary to avoid getting sued Accounts for ~34% of all healthcare costs
What are some of the different proposals for reforming Social Security?
Privatization, bring in more immigrants (pay taxes), reduction in benefits, wealthy doesn't receive, increase eligibility age
Tax cuts
Republican
Have there been any major changes to Obamacare? If so, what?
Revoked individual mandate through tax legislation Health and human services mandate: no contraceptive services required
Is Medicare and Medicaid an example of socialized medicine, a single-payer system, or an out-of-pocket system?
Single-Payer System
What is the single largest spending item in the federal budget?
Social Security
Which tax is the largest for most American taxpayers?
Social security tax
Single-payer system
Specified citizens (entitlements) can access the health care system which taxpayers pay into. Ex: Medicare and Medicaid
What is mandatory spending? Be able to identify the budget items that are "mandatory."
Spending not controlled by normal budgetary process EX: Social security, Medicare, Medicaid
What is protectionism?
Tarrifs, quotas and other barriers to free trade
Know how spending cuts, spending increases, tax increases, and tax cuts impact the size of the deficit and the debt in the short-term.
Tax cuts increase the size of deficits
supply-side economics
Tax incentives, tax cuts, and reduced governmental spending to allow for greater productivity and investment
What are capital gains taxes?
Tax placed upon the buying and selling of assets (stocks, investment properties, etc)
What is TANF?
Temporary Assistance to Needy Families Education and job training
Defending sweatshops? How might someone defend sweatshops?
Tend to pay more than the average wage in said countries Economically develop countries
Wisconsin v. Yoder (1972)
The Court ruled that Wisconsin could not require Amish parents to send their children to public school beyond the eighth grade because it would violate long-held religious beliefs. Compelling interest test
Keynesian economic theory
The creation of demand through spending and lower taxes.
What is a deficit?
The excess of federal expenditures over federal revenues in a given fiscal year (how much fed gov is spending vs taking in)
Classical Economic Theory
The market as a self-adjusting mechanism
What is the difference between labor force participation rate and unemployment rate?
The participation rate measures the percentage of Americans who are in the labor force. The unemployment rate measures the percentage within the labor force that is currently without a job.
Did TX expand Medicaid?
no
Is the United States a part of the Trans-Pacific Parternship (TPP)?
no
Is there any correlation between federal spending and the poverty rate?
no
What are some of the major provisions of Obamacare?
-Requires most individuals to have health insurance-Choice of expansion of Medicaid up to 138% above federal poverty line (about 30 states)-Employers must provide coverage or pay an 8% payroll tax-Availability of insurance for those with pre-existing conditions-Young adults can stay on parents insurance until 26-Employers must provide contraceptive services as part of healthcare packages provides to employees (slightly revised by Supreme Ct. and Trump exec. order)
Tax increases
-a negative impact on the deficit -Democrats favor
Spending cuts
-a negative impact on the deficit -Republicans favor
Spending increases
-a positive impact on the deficit -Democrats favor
How much federal spending is devoted to fighting poverty?
1.04 trillion
? In the United States, who benefits from the growth in international trade? Who is disadvantaged?
1.Better for exporters-increased market-consumers benefit-lower prices-skilled workers in favored, exporting industries-favored industries- aircraft, computers, scientific 2. Unskilled workers growing gap between rich and poor jobs lost
The average recipient of Medicare has paid, on average, ______ in Medicare taxes, but are expected to receive an average of ________ in benefits
100k, 300k
What is the debt-to-GDP ratio?
107%
How many federal programs are devoted to fighting poverty?
13
What is the current debt?
27.8 trillion
What is the current unemployment rate?
6.7%
What is the labor force participation rate?
61.5%
The top 50% of all taxpayers pay _______ of what the government takes in with regards to the income tax.
97%
Baseline-budgeting
An estimate of spending, revenue, the deficit or surplus, and the public debt expected during a fiscal year under current laws and current policy. The baseline is a benchmark for measuring the budgetary effects of proposed changes in revenues and spending (what we use)
Who is the United States' largest trading partner?
China
What is meant by the employer mandate?
Employer mandate: requires that all businesses with 50 or more full-time employees (FTE) provide health insurance to at least 95% of their full-time employees and dependents up to age 26 or pay a fee
What is the largest source of federal revenue?
Federal income tax Top people pay 97% of the income tax (depends on how much $ you have)
Monetary economic theory
Fine tuning the economy through regulation of the money supply.
When did the United States follow protectionist policies?
Followed from WWI to WWII
When the federal government is alleged to violate one's freedom of religion, what test does the Court use? A state?
Free-exercise clause
Employment Division v. Smith (1990)
General Applicability Test - If laws are applicable, you cannot exempt yourself from the law The Court ruled that Oregon could deny unemployment benefits to workers fired for using drugs (peyote) as part of a religious ceremony.
Be able to characterize U.S. trade policy. What did we mean when we said that the U.S. had a three-pronged trade strategy?
Global Reduction on Tariffs. WTO World Trade Organization lowered tariffs-Regional integration, NAFTA North American Free Trade Agreements, eases imports and exports between US Mexico and Canada
What role does the OMB play in the budgetary process?
Goes to gov agencies and collects budgetary request
What are entitlements? Know that 2/3 of all entitlement spending goes to the elderly
Government benefits that are dispensed to anyone who meets the criteria set forth by Congress. Most mandatory spending is in the form of entitlements Most goes to elderly: social security & medicare
Socialized medicine
Government ownership of healthcare facilities and staff-Doctors, nurses, and specialists are all government employees
What was the Smoot-Hawley Act?
High tariffs placed on foreign goods between WWI and WWII
Is the poverty rate in Texas higher or lower than the national average?
Higher, unfair bc of cost of living differences (cheaper to live in TX)
What does it mean to balance one's sincere religious beliefs of an individual against state interests?
In public you have to respect other peoples religious beliefs
What are some of the reason why the cost of health insurance have been increasing?
Increased premiums and deductibles, part of economy, and increased per capita healthcare spending
Who is the current chairman of the Fed?
Jerome Powell
West Virginia v. Barnette (1943)
Johovah's witness didn't want to say pledge of allegiance, court ruled in favor of this Compelling interest test
Who was president when Medicare and Medicaid were enacted?
Lyndon B. Johnson
What is NAFTA?
North American Free Trade Agreement Regional Integration
What is the WTO?
World Trade Organization Global Reduction on Tariffs
Zero-based budgeting
all expenses must be justified for each new period
What does the race-to-the-bottom mean?
competitive situation where a company, state, or nation attempts to undercut the competition's prices by sacrificing quality standards or worker safety (often defying regulation), or reducing labor costs.
Who is Adam Smith?
created Classical economic theory (laissez-faire economics)
To whom does Medicare pertain?
elderly
What does "comparative advantage" mean?
if nations devote more of their resources to the production of those goods that they produce most efficiently and trade those goods that other nations produce more efficiently then all trading nations benefit; we should trade specialized goods to lower prices
Know that before the recently signed tax bill corporate tax rates in the United States were the highest in the industrialized world. What were the consequences of this?
it raised the deficit and hurts job creation and wages
What are some the dangers of a large debt?
limitation of choice, tax increases (discouraging production), investor confidence, hurts economic growth (90% tipping point), dependence on others, investor confidence
What is meant by 'tort reform'?
make it harder to have frivolous lawsuits (drs and hospitals) 1. have loser pay loss/ pay court cost2. limit how much one can sue for (Frivolous law suits drive up the cost of healthcare)
To whom does Medicaid pertain?
poor
Progressive tax
require high-income groups to pay larger percentage of their incomes in taxes than low-income groups. (EX: income taxes, corporate tax, real estate tax)
What is meant by the individual mandate?
requires most Americans to have health insurance or pay a tax penalty unless you qualify for an exemption
What groups are unlikely to have health insurance?
self employed, service-industry, young
What type of system resembled the VA?
socialized medicine