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Federal Government Social Policy

Tools and techniques that the federal government has at its disposal for regulating and effecting economic policy

The economic policy of the United States is regulated by the Federal Reserve System (the central bank), which comprises of a federal government agency based in Washington D.C, and 12 regional reserve banks (William &b Alan 439). Generally, Fed (the Federal Reserve System) controls the US economy through regulating the amount of money in circulation and that in the Federal Reserve. Nevertheless, to achieve this goal, Fed employs two main tools at its disposal, the monetary and the fiscal policies. The monetary policy entails actions that are undertaken by the Federal Reserve in order to influence the amount of credit and money in the U.S economy. There are three main monetary policy tools that the Fed uses in order to influence the American economy. First, the Federal Reserve employs open market operations as the principle tool for regulating the economy. This tool encompasses selling and purchasing of the U.S. treasury and federal agency securities in the financial markets, and this influences the level of reserves in the banking system (William &b Alan 439-43). This tool (open market) stipulates that Fed doesn`t independently make a choice on which securities dealers it will transact with on a particular day. Instead, this choice arises from an open market where numerous securities dealers compete.

Secondly, the Fed sets a discount rate, which entails the interest rate that banks pay to the Federal Reserve Bank after borrowing short term loans. Lastly, Fed sets reserve requirements, which is the amount of funds that commercial banks and other depository facilities must maintain in reserve against deposits in banks accounts.  On the other hand, fiscal policies refers to the federal government`s ability to adjust its expenditure levels and taxation rates in order to influence its economy (William &b Alan 443). However, the federal government influences the behavior of businesses through regulating trade policies such as import quotas and tariffs, and contracting with private entities in performing government responsibilities.

Types of social policies: the differences between contributory and noncontributory programs

A social policy entails measures for altering, maintain, and creating a certain set of living conditions that supports and promotes the wellbeing of all citizens. Generally, a social policy is a subset of public policy, which is the stipulated measure for operating the nation as a whole. Nevertheless, there are numerous types of social policies in the United States, including human welfare and wellbeing, employment insurance, justice, social security, pensions, family policy, crime and criminal justice, child protection, social care, social exclusion, education policy, social housing, health care among others (Norton & Company 2009).

Pension refers to the amount of funds that an individual invests from his income in order to ensure he or she will have a substantial amount of money to sustain him or her after retirement. Pension plan entails the method of investing this amount. Nevertheless, there are two types of pension plan, contributory and non-contributory pension plans. A contributory program occurs when an individual is mandated to contribute some amount of money in order for him or her to receive the benefits of the program after retirement. In most cases, the payment correlates with an individual`s level of income. A good example is Medicare and Social Security (Norton & Company 2009). On the other hand, a non-contributory program exists where an individual is entitled to receive benefits without considering any prepayment, and it is given based on an individual`s needs. A good example is the Temporary Assistance to Needy Families (TANF).

There are numerous concerns relating to social policy spending. For example, most Americans complain that the health care costs are much high for most to afford Medicaid and Medicare programs. Apparently is so due to the fact that the Americans refuse to have an universal health care since they don’t trust one another (Norton & Company 2009). 

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