YouTube Transcript:
Ideology and ECONOMIC POLICY [AP Gov Review_ Unit 4 Topic 9 (4_9)]

hey there and welcome back to heimlich's
history now i've been going through unit
four of the ap government curriculum and
in this video we're going to talk about
how political ideology shapes economic
policy so if you're ready to get them
bring cow's milk supply side style well
then let's get to it so in this video
here's what we're trying to do describe
different political ideologies on the
role of government in regulating the
marketplace easy peasy lemon squeezy so
if you're here for the last couple of
videos i've been describing different
political ideologies and their
respective commitments and we focused on
liberal and conservative ideology and
just to keep things spicy we're going to
go ahead and add a third ideology to the
mix in this video namely libertarian
ideology so how do each of these
ideologies think about government
intervention in the economy so glad you
asked let's talk about it now if we're
going to talk economics there are two
terms that you're going to need to be
familiar with and the first is fiscal
policy fiscal policy refers to decisions
the government makes about government
spending and taxation so fiscal policy
is the decision that the government has
to make about how much money to spend
and on what like do we really need
another f-15 fighter jet oh yeah okay so
when the government decides on that kind
of thing that is fiscal policy and this
is under the control of congress who
decides what to spend where the second
term you need to know is monetary policy
now monetary policy refers to the
decisions the government makes about how
much money should be in the economy the
reason i have this little green bill in
my wallet is because the government has
decided that there needs to be money in
the economy so when the government
decides to put more of those bills into
the economy or take some out they are
engaging in monetary policy and this is
under the control of the federal reserve
often referred to as the fed and the fed
does this by buying and selling
government bonds setting reserve
requirement at banks which means they
mandate how much money the banks have to
keep in their faults and setting
interest rates okay to sum up fiscal
policy government spending and taxation
monetary policy how much money is in the
economy so with that said let's talk
about how different ideologies approach
these different policies liberals tend
to favor the most government
intervention in the economy compared to
the other ideologies to liberals
government spending and government
regulation of business is what keeps the
economy strong and keeps everyone safe
and secure so when it comes to fiscal
policies liberals are big spenders and
they didn't just pluck that idea out of
the realm of unicorns and rainbows they
actually have theoretical support for
this idea and the name for it is
keynesian economics and this theory
really majors on fiscal policy this
theory came into fashion in the 1930s in
the midst of the great depression in the
election of democrat franklin roosevelt
now i mentioned in the previous video
that the president preceding roosevelt
namely herbert hoover was a conservative
and so when the stock market crashed and
the great depression began and all
turned to doom and gloom hoover's
conservative position led him to do very
little to hoover like the market is
going to correct itself in the long run
and all shall be well no need to get big
daddy government meddling in the economy
that's when john maynard keynes came
along and rebuked hoover and all who
thought in similar ways saying in the
long run we're all dead in other words
yes the economy will correct itself in
the long run but there is immense
suffering now and something must be done
while people are suffering besides just
waiting for the resolution of the crisis
so roosevelt being a good keynesian
pumped up government spending like a
boss by providing federal work programs
and economic safety nets in the form of
social security now conservatives on the
other hand want less government
intervention in the economy to
conservatives letting the free market
determine people's choices is a far
better solution than getting the
government involved to them this
position upholds people's freedom to
make their own economic choices and
keeps the government from piling up debt
to pay for all the programs so when it
comes to fiscal policy conservatives
want less government programs and lower
taxes and again conservatives didn't
just pluck these ideas out of the realm
of unicorns they do have theoretical
support for it and it comes in the form
of supply-side economics if keynesians
want to address economic woes through
government spending supply siders want
to address economic woes by supporting
businesses the idea here is that if more
goods are injected into the economy then
such an action will shore up economic
turmoil and who produces goods for the
economy businesses now as you probably
know the most basic terms of free market
economics are supply and demand
businesses supply goods according to the
demand from the consumers and so that's
why it's called supply-side economics
support the supply side of that equation
which is to say businesses the producers
of goods and the economy will be good so
the way conservatives propose to do that
is by keeping government regulations of
business to a minimum and lowering taxes
so that people have more money to spend
on those goods now i haven't said
anything about how conservatives and
liberals view monetary policy and that's
because it's pretty complicated however
what you do need to know for your exam
is this conservatives tend to favor
using monetary policy to stabilize the
economy whereas liberals tend to believe
that monetary policy is too slow to
affect real change okay now let's talk
about libertarian ideology and the truth
is libertarians are strange birds that
are difficult to classify on the whole
but since we're talking about economics
in this video you should know that
libertarians want the least amount of
government intervention possible to
libertarians the only thing the
government is good for economically
speaking is to protect personal property
rights and ensure that nothing hinders
voluntary trade they want no regulation
on businesses and minimal government
programs okay thanks for watching click
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