The Fed and Monetary Policy
What is the central banking system in the U.S.?
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed)
What is fiscal policy?
Fiscal policy uses government spending and tax policies to influence economic conditions such as employment, inflation, and growth.
In terms of spending an budgets, what can the federal government do that state and local governments can't?
Run deficits
Unlike the federal government, this type of budget in state and local governments separates day-to-day operating expenses from this type of budget, which is reserved for long-term facilities and equipment paid for through bonds?
Capital budgets (to cover the cost of long-term expenses for equipment and facilities), which is in contrast to the operating budget (to cover the cost of day-to-day functions)
When was the last time we had a governor that was a democrat (which also happens to to be the last time we had a governor that was a woman)?
From 1991-1995, with governor Ann Richards
Why is the federal reserve considered an independent central bank despite being within the government?
It was designed to be insulated from political interference.
What is supply side economics?
Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade. According to supply-side economics theory, consumers will benefit from greater supply of goods and services at lower prices, and employment will increase.
In 1940, how did political scientist V. O. Key Jr. frame budgeting as a problem?
“On what basis shall it be decided to allocate x dollars to activity A instead of activity B?”
What is Keynesian economics in the context of Public admin?
Keynesian economics preaches that the government can use its taxing and spending powers to moderate those cycles, to offset the dangers of both too-rapid growth (inflation) and recession (unemployment).
The theory suggests that in good times, the government ought to run a surplus to keep the economy from expanding too quickly; in bad times, it should run a deficit to keep the economy from becoming sluggish.
Who was our last democratic senator?
Lloyd Bentsen, who was first elected in 1976,who resigned his post in 1993 to become U.S. Treasury Secretary under President Bill Clinton.
Interest rates on loaned money to other banks.
What Is the Federal Budget Deficit?
The deficit is the annual difference between government spending and government revenue. Every year, the government takes in revenues in the form of taxes and other income, and spends money on various programs, such as national defense, Social Security, and healthcare. If the government spends more than it takes in, then it runs a deficit. If the government takes in more than it spends, it runs a surplus.
What is the 1921 law revolutionized federal finance by requiring the president to submit an annual budget to Congress and creating the Bureau of the Budget?
The Budget and Accounting Act of 1921
What administrative maneuver occurs when an agency facing budget cuts threatens to shut down its most visible and popular service to force legislators to restore funding?
The Washington Monument ploy
What disaster (and the response to it) is Shin Godzilla an allegory of?
The March 11 tsunami and earthquake that led to the Fukushima nuclear disaster.
What is one of the three key objectives of the federal reserve?
Maximizing employment, stabilizing prices, and moderating long-term interest rates.
The debt is the total amount of money the U.S. government owes. It represents the accumulation of past deficits, minus surpluses. Debt is like the balance on a credit card statement, which shows the total amount accrued over time. The amount of debt held by the public at the end of fiscal year 2025 was $30.2 trillion, or 99 percent of GDP.
During the Great Depression, what British economist argued that governments should actively use taxation and spending to steer the national economy?
John Maynard Keynes
Programs like Social Security and Medicare fall under this spending category, where outlays are locked in by mandatory entitlement formulas?
Uncontrollable expenditures (or mandatory spending)
Who is the current Administrator of the Centers for Medicare and Medicaid services, along with being a co-chairman of the President's council on Sports, Fitness, and Nutrition?
Dr. Mehmet Oz
What is monetary policy?
Monetary policy controls a nation's overall money supply for the purpose of economic growth.
What is the federal debt ceiling?
When the federal government runs a deficit—that is, spends more than it collects in revenue—it borrows money to cover the difference, usually by issuing IOUs in the form of U.S. Treasury securities. The debt ceiling is a legal limit on the amount of borrowing the Treasury can do
The recurring need to lift the ceiling on overall U.S. Treasury borrowing is always a political hot potato. The U.S. government’s borrowing hit the debt limit ($36.1 trillion) on January 1, 2025. The Treasury then initiated what are known as “extraordinary measures” to conserve cash. On May 9, 2025, Treasury Secretary Scott Bessent told Congress that unless Congress acted, the Treasury probably wouldn’t be able to pay its bills in full and on time beginning in August. Congress did act. In the One Big Beautiful Bill Act, signed into law in July 2025, Congress raised the debt ceiling by $5 trillion, to $41.1 trillion, which probably will delay another debt-ceiling showdown for a year or two.
Formulated by Aaron Wildavsky, this bottom-up approach assumes an agency's existing "base" continues and political battles focus only on small, "fair-share" increases. This is usually done in the context of an already existing budget.
Incrementalism (or incremental budgeting)
Exceeding $80 billion annually, this secret portion of the federal national security budget funds intelligence operations like the CIA and NSA away from public oversight. (Hint: Snowden leaked this)
The black budget
Who is the current Secretary of Education?
Linda McMahon, primarily known for her role as a corporate leader of WWE, including a role as CEO