Heimlich's History: Political Ideology and Economic Policy

Overview

• Discussion on how political ideologies shape economic policy.
• Focus on liberal, conservative, and libertarian ideologies.
• Key economic terms: fiscal policy and monetary policy.

Key Economic Terms

Fiscal Policy

• Decisions about government spending and taxation.
• Controlled by Congress.
• Example: Decisions on military spending like F-15 fighter jets.

Monetary Policy

• Decisions about money supply in the economy.
• Controlled by the Federal Reserve (the Fed).
• Tools include buying/selling government bonds, setting bank reserve requirements, and interest rates.

Ideological Perspectives on Economic Policy

Liberal Ideology

• Favors significant government intervention in the economy.
• Believes government spending and regulation keep the economy strong and secure.
• Supported by Keynesian Economics:
  • Emerged during the Great Depression (1930s).
  • Advocates for increased government spending to address economic downturns.
  • Example: Franklin Roosevelt's New Deal programs.

Conservative Ideology

• Advocates for minimal government intervention.
• Supports free market as a means to uphold individual economic freedom.
• Supported by Supply-Side Economics:
  • Focuses on supporting businesses to boost economic growth.
  • Proposes minimal regulations and lower taxes.
  • Belief that increased business activity will stabilize the economy.

Libertarian Ideology

• Seeks the least government intervention possible.
• Government's economic role: Protect property rights and ensure free trade.
• Opposes business regulation and advocates for minimal government programs.

Monetary Policy Views

• Conservatives: Favor using monetary policy to stabilize economy.
• Liberals: Believe monetary policy is too slow for real change.

Conclusion

• Exam preparation: Review packet available for better understanding and scoring high in exams.
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