social welfare policies
policies that provide benefits to individuals, cash or in-kind, to individuals, bases on either entitlements or means testing
unemployment rate
As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs.
underemployment rate
As measured by the Bureau of Labor Statistics, a statistic that includes (1) people who aren't working and are actively seeking a job, (2) those who would like to work but have given up looking, and (3) those who are working part-time because they cannot
inflation
A rise in prices of goods and services.
consumer price index
the key measure of inflation--the change in the cost of buying a fixed basket of goods and services
laissez-faire
the principle that government should not meddle in the economy.
monetary policy
government manipulation of the supply of money in private hands - one of two important tools by which the government can attempt to steer the economy
monetarism
An economic theory holding that the supply of money is the key to a nation's economic health, with too much cash and credit in circulation producing inflation
federal reserve system
The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply.
fiscal policy
use of the federal budget - taxes, spending, and borrowing - to influence the economy; along with monetary policy, a main tool by which the government can attempt to steer the economy. This is almost entirely determined by Congress and the president.
keynesian economic theory
Named after English economist John Maynard Keynes, the theory emphasizing that government spending and deficits can help the economy deal with its ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy whe
supply-side economics
An economic theory, first applied during the Reagan administration, holding that the key task for fiscal policy is to stimulate the supply of goods, as by cutting tax rates.
entitlement programs
government programs providing benefits to qualified individuals regardless of need
means-tested programs
government programs providing benefits only to individuals who qualify based on specific needs
income distribution
the way the national income is divided into "shares" ranging from the poor to the rich
relative deprivation
A perception by an individual that he or she is not doing well economically in comparison to others
income
the amount of money collected between any two points in time
wealth
the value of assets owned
poverty line
the income threshold below which people are considered poor, based on what a family must spend for an "austere" standard of living, traditionally set at three times the cost of a subsistence diet
feminization of poverty
the increasing concentration of poverty among women, especially unmarried women and their children.
progressive tax
A tax by which the government takes a greater share of the income of the rich than of the poor - for example, when a rich family pays 50% of its income to taxes, and a poor family pays 5%
proportional tax
a tax by which the government takes the same share of income from everyone, rich and poor alike
regressive tax
a tax in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers. The opposite of a progressive tax, in which tax rates increase as income increases
Earned Income Tax Credit
also known as the EITC, a refundable federal income tax credit for low- to moderate-income working individuals and families, even if they did not earn enough money to be required to file a tax return
transfer payments
Benefits given by the government directly to individuals - either cash transfers, such as Social Security payments, or in-kind transfers, such as food stamps and low-interest college loans
Social Security Act of 1935
created both the Social Security Program and a national assistance program for poor families, usually called Aid to Families with Dependent Children
Personal Responsibility and Work Opportunity Reconciliation Act
the welfare reform law of 1996 which implemented the Temporary Assistance for Needy Families program
Temporary Assistance for Needy Families
replacing Aid to Families with Dependent Children as the program for public assistance to needy families, this requires people on welfare to find work within two years and sets a lifetime maximum of five years
Social Security Trust Fund
the "account" into which Social Security employee and employer contributions are "deposited" and used to pay out eligible recipients