ECONOMIC POLICYMAKING
Who controls the Economy today?
The
President
AND
Congress!
The Federal Economy
The President
The Congress
1921 Budget &
Accounting Act
1921- Congress hands over
the reigns to the President
to prepare the budget
CEA- Council of
Economic Advisors
(3 members)
OMBOffice of Management & Budget
(over 500 workers)
Congressional Budget
& Impoundment Act 1974
CBO- Congressional
Budget Office
Market vs. Non Market Economies
• ADAM SMITH
ADAM SMITH
Government keep
your hands out of
Business!
LAISSEZ FAIRE
JOHN MAYNARD KEYNES
• We can control the
Economy!
• Aggregate Demand
can be controlled
through Monetary and
Fiscal means.
FISCAL POLICIES
SPENDING
&
TAXING
MONETARY POLICIES
Money Supply
&
Interest Rates
The Federal Reserve
Established 1913
7 Members all
appointed by the president
in office
14 yr. Tenure
Federal Chairman
JANET YELLIN
TAXES WE PAY
Property- pays for education,
police, and fire protection
Excise- ex: gasoline tax
Personal- tax on your income
Sales Tax- State and Local
OH= 6% Geauga County- 6.5%
Cuyahoga County- 7.5%
TAXES WE PAY
Payroll Taxes- Social Security,
Medicare etc.
LicensesSocial Insurance- Social Security
User Fees- turnpike tolls
2013 Ohio Income Tax Table
2012 - 2013
Tax Bracket (Single)
Marginal Tax Rate
$0+
0.59%
$5,100+
1.17%
$10,200+
2.35%
$15,350+
2.94%
$20,450+
3.52%
$40,850+
4.11%
$81,650+
4.70%
$102,100+
5.45%
$204,200+
5.92%
Federal Income Tax Brackets for 2012
Forbes Magazine ---forbes.com
Tax Bracket
Married Filing Jointly
Single
10% Bracket
$0 – $17,400
$0 – $8,700
15% Bracket
$17,400 – $70,700
$8,700 – $35,350
25% Bracket
$70,700 – $142,700
$35,350 – $85,650
28% Bracket
$142,700 – $217,450
$85,650 – $178,650
33% Bracket
$217,450 – $388,350
$178,650 – $388,350
35% Bracket
Over $388,350
Over $388,350
Figure 18.2
Federal Spending in 2011, by Function
17
TARP
Troubled Asset Relief Programs
Passed in 2008 by President Bush
American Recovery and
Reinvestment Act (ARRA)
2009
February 13 ARRA was passed by both the House and Senate .
Originally intended to be a bipartisan bill, the passage of the bill was
largely along party lines. No Republicans voted for it in the House
& three moderate Republicans voted for it in the Senate Collins and
Snowe of Maine and Specter of PA.
The bill combined TAX BREAKS with spending on INFRASTRUCTURE
Projects, extension of welfare benefits, and education. The final cost
of the bill was $787 billion, and almost $1.2 trillion with debt service
included.
President Obama signed the Act into law on February 17, 2009.