Chapter 14

Decisions a government makes that affect the production, distribution, and consumption of goods; the provision of services; the flow of income; and the distribution of wealth

French for “leave things alone” and the view, in economics, that government should not interfere in the workings of the economy

The view in economics that economic decision making should be completely under the control of political authority

A minor and relatively short period of economic decline

A period of serious and sustained economic decline

Opposite of free trade, belief that government should protect American business and industry by restricting the flow of foreign goods into the United States

Belief that America’s economic interests are best served by allowing foreign producers to sell their goods without restriction in the United States

Governmental decisions about taxing and spending that affect the economic life of a nation

Governmental decisions about how much money should circulate in the economy and what the cost of borrowing money, the interest rate, should be

An agency in the Executive Office of the President that provides the president with budgetary information and advice and is responsible for compiling the president’s annual budget proposal to Congress

An excess of government expenditures over revenues

The total amount of money that the national government owes to lenders, such as banks, individuals and foreign investors, insurance companies, and the variety of financial institutions that purchase government securities

An excess of government revenues over government expenditures

Charges that the government must pay to the public for the use of money borrowed to cover budget deficits and added to the interest paid to government trust funds to create total interest costs

A model of decisions making that holds that new policies differ only marginally from existing policies

Government programs, such as Social Security expenditures, in which spending automatically increases from one year to the next without specific annual appropriations action by Congress

Programs, such as Social Security and Medicaid, whereby eligible individuals receive benefits according to law

A planned statement of expenditure that includes specific categories of spending

For budget and accounting purposes in the national government, the 12-month period beginning on October 1 and ending on September 30 of the following calendar year

Congressional enactment that creates or continues a policy program and the agency administering it

Congressional enactment that funds an authorized program with a specific sum of money

Most state governors have this power through which a chief executive reacting to a bill passed by the legislature, may accept some items in the bill while also rejecting other items in the same bill. The president does not have that power

A proposal for a constitutional amendment that would require the federal government to operate with a budget in which revenues equaled or exceeded expenditures

Legislative action taken by Congress to allow spending to proceed at the previous year’s level when Congress has not met the deadline for reaching agreement on appropriations for the next fiscal year

Legislation that significantly changed congressional budget procedures by creating budget committees, establishing a budget decision timetable, changing the fiscal year, placing limits on presidential impoundments, and establishing the Congressional Budget Office

Legislation that significantly changed congressional budget procedures by creating budget committees, establishing a budget decision timetable, changing the fiscal year, placing limits on presidential impoundments, and establishing the Congressional Budget Office

A congressional staff unit that provides Congress with budgetary expertise, independent of the president’s budget staff, to help Congress clarify budgetary choices

Legislative enactment formally known as the Balanced Budget and Emergency Deficit Control Act of 1985, that mandated progressively higher annual cuts in the deficit to achieve a balanced budget by 1991. In 1986 the Supreme Court declared the act’s procedure for automatic across-the-board spending cuts unconstitutional

The process through which the president makes budget cuts in the government programs to meet the mandates in law requiring ceilings on specific categories of spending

Legislation that fundamentally changed budget deficit reduction efforts from the focus on deficit targets contained in Gramm-Rudman-Hollings to a focus on ceilings or caps on specific categories of spending