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14.3b Criticism of Regulation and Deregulation

The costs of compliance incurred by business, and the intrusion by the federal government, has resulted in criticism being leveled at regulatory policy. For instance, expensive technology and cleaner burning fuels had to be used by electric utilities in order to meet the air pollution standards laid down. The brunt was borne by customers. The result of this public policy was a demand for deregulation.

Deregulation in the 1970s was based on the idea that the customers would benefit if there were fewer regulations, as this would increase competition. This was the case with the airlines industry in which the fares were decreased after deregulation. This led to the operation of several small carriers. But it did not work as it ultimately led to consolidation. Many have also felt that deregulation of the savings industry was the cause of the savings-and-loan crisis of the late 1980s. Thus "reregulation" seems to be growing popular.

14.3c Social Welfare Policy

Early in the history of America, homes for the poor were maintained by countries, cities and towns. Hospitals and institutions for the feeble-minded, insane, blind and other unfortunates were established by states. In the early 20th century, financial assistance was extended to the blind, the aged and indigent mothers, by the states. However, the welfare work undertaken by the states and local governments was not adequate to meet the pressing needs of the underprivileged in society.

Before the Depression that began in 1929, the federal government assumed very little responsibility for the economic security of the American people. Its activities were limited to pensions for war veterans and merchant seamen, some provisions for the welfare of the Indians, and encouragement to the states in providing relief to needy children.

However the Great Depression soon revealed the inadequacy of the nationís approach to economic security and social welfare. The federal government then built up a social security program that is now widely accepted by the American people. The program is based on the assumption that society must take care of old people, the unemployed and the helpless.

14.3d Social Security

The Social Security Act passed by congress in 1935 laid the foundation of the social welfare system in the U.S. The national governmentís social security activities consist of many different kinds of activities.

The national and state governments jointly operate the unemployment insurance system. To encourage the states to establish programs of unemployment compensations, a payroll tax is imposed on every employer of four or more persons. In 1954, the Congress extended unemployment benefits to federal civilian employees and servicemen.

Old-age, survivors of war, and disability insurance enables workers to build up, by periodic payments, an income for themselves and their families as a partial replacement of earnings that are lost owing to death, retirement from disability, or old age.

The aim of the Aid for Families with Dependent Children (AFDC) is to keep families with children under eighteen together in spite of the death, disability, or desertion of the breadwinner of the family.

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14.0 Introduction
14.1 The Policy Making Process
14.2 Politics and Policy Making
14.3 Policy Making in Action

Chapter 15

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