Direct and Indirect Government Services

• There are multiple ways goods and services can be delivered by the government
• Methods include direct or indirect means
• Also, government can act by proxy through non-governmental organizations

Direct vs. Indirect Delivery

• Direct administration involves the government providing services themselves (e.g., public schools, police)
• Indirect administration involves the government funding or regulating other entities to deliver services
• Forms of indirect administration include:
  • Grants that go to states or nonprofits
  • Contracts with private companies to provide services
  • Regulations that set rules for others to follow
  • Tax expenditures, which are special tax breaks that encourage certain behaviors
  • Loan programs from the government designed for specific purposes

Government By Proxy

• Government may rely more on non-governmental actors (private organizations, nonprofits)
• This represents a move away from direct governmental actions

Measuring the Economy

• Growth (GDP) measures the total value of goods and services produced
• Employment relates to the unemployment rate, which indicates the health of the labor market
• Change in prices (CPI) measures inflation, which is the cost of living changes

Methods of Policy Analysis

• Cost-benefit analysis compares the dollar value of benefits versus costs
• Cost-effectiveness selects the best outcome for the least cost without needing to monetize everything
• Risk assessment identifies the likelihood and impact of potential harms
• Forecasting means predicting future conditions (economic, environmental, etc.)
• Impact analysis assesses the policy outcomes, whether intended or unintended
• Political feasibility addresses whether the policy can gain support
• Implementation analysis assesses whether the proposed policy can be carried out as planned
• Program evaluation assesses if the policy was effective and if it met its intended goals
• Ethical analysis questions whether the values or morals behind the policy are justifiable

Debt vs. Deficit

• Deficit is the annual gap between revenue and spending
• Debt is the total amount the government owes over time from accumulated deficits

Proximate vs. Root Causes

• Proximate factors are immediate, surface-level causes
• Root causes are deeper, underlying issues, which are often structural

Incentives, Subsidies, and Support

• Incentives encourage certain behaviors (e.g., tax credits)
• Subsidies offer financial support to reduce costs (e.g., farm subsidies)
• Support refers to general aid or services, potentially encompassing both incentives and subsidies

Areal vs. Functional Systems (Bureaucracy)

• Areal systems are organized by geographic area (e.g., regional offices)
• Functional systems are organized by specific tasks or expertise (e.g., EPA, IRS)

Types of Government Agencies

• Cabinet departments are major executive offices (e.g., State, Defense, Education)
• Independent agencies are not part of a department but still report to the president (e.g., NASA)
• Independent regulatory agencies make and enforce rules while remaining insulated from politics (e.g., FCC, SEC)
• Government corporations are run like businesses but owned by the government (e.g., USPS, Amtrak)

Administrative Rulemaking

• Agencies create detailed rules based on laws passed by Congress

Administrative Adjudication

• Agencies settle disputes similarly to a court (e.g., social security appeals)

Rational Comprehensive vs. Incremental Policymaking

• Rational-comprehensive policymaking is big, data-driven, and planned from scratch
• Incremental policymaking makes small changes to existing policies and is more realistic

Entitlement (Mandatory) vs. Discretionary Spending

• Mandatory spending (70%) is required by law (e.g., Social Security, Medicare)
• Discretionary spending (30%) is decided yearly in the budget (e.g., defense, education)

Types of Taxes

• Income tax is levied on earnings
• Payroll tax is for Social Security and Medicare
• Corporate tax is based on business profits
• Sales tax is applied on goods and services
• Excise tax is on specific items (e.g., gas, cigarettes)
• Property tax is a local tax on real estate

Fiscal vs. Monetary Policy

• Fiscal policy involves the government using taxes and spending to influence the economy (Congress + President)
• Monetary policy has the Federal Reserve managing the money supply and interest rates