0:00 hey there and welcome back to heimlich's
0:01 history now i've been going through unit
0:02 four of the ap government curriculum and
0:04 in this video we're going to talk about
0:05 how political ideology shapes economic
0:08 policy so if you're ready to get them
0:09 bring cow's milk supply side style well
0:12 then let's get to it so in this video
0:13 here's what we're trying to do describe
0:15 different political ideologies on the
0:17 role of government in regulating the
0:19 marketplace easy peasy lemon squeezy so
0:21 if you're here for the last couple of
0:22 videos i've been describing different
0:24 political ideologies and their
0:25 respective commitments and we focused on
0:27 liberal and conservative ideology and
0:29 just to keep things spicy we're going to
0:31 go ahead and add a third ideology to the
0:33 mix in this video namely libertarian
0:35 ideology so how do each of these
0:37 ideologies think about government
0:38 intervention in the economy so glad you
0:41 asked let's talk about it now if we're
0:42 going to talk economics there are two
0:43 terms that you're going to need to be
0:45 familiar with and the first is fiscal
0:46 policy fiscal policy refers to decisions
0:49 the government makes about government
0:51 spending and taxation so fiscal policy
0:53 is the decision that the government has
0:55 to make about how much money to spend
0:57 and on what like do we really need
0:58 another f-15 fighter jet oh yeah okay so
1:01 when the government decides on that kind
1:03 of thing that is fiscal policy and this
1:05 is under the control of congress who
1:07 decides what to spend where the second
1:08 term you need to know is monetary policy
1:11 now monetary policy refers to the
1:12 decisions the government makes about how
1:14 much money should be in the economy the
1:16 reason i have this little green bill in
1:18 my wallet is because the government has
1:19 decided that there needs to be money in
1:21 the economy so when the government
1:22 decides to put more of those bills into
1:24 the economy or take some out they are
1:26 engaging in monetary policy and this is
1:29 under the control of the federal reserve
1:30 often referred to as the fed and the fed
1:32 does this by buying and selling
1:34 government bonds setting reserve
1:35 requirement at banks which means they
1:37 mandate how much money the banks have to
1:38 keep in their faults and setting
1:40 interest rates okay to sum up fiscal
1:41 policy government spending and taxation
1:44 monetary policy how much money is in the
1:46 economy so with that said let's talk
1:48 about how different ideologies approach
1:50 these different policies liberals tend
1:51 to favor the most government
1:53 intervention in the economy compared to
1:54 the other ideologies to liberals
1:56 government spending and government
1:57 regulation of business is what keeps the
1:59 economy strong and keeps everyone safe
2:01 and secure so when it comes to fiscal
2:03 policies liberals are big spenders and
2:05 they didn't just pluck that idea out of
2:06 the realm of unicorns and rainbows they
2:08 actually have theoretical support for
2:09 this idea and the name for it is
2:11 keynesian economics and this theory
2:13 really majors on fiscal policy this
2:15 theory came into fashion in the 1930s in
2:17 the midst of the great depression in the
2:18 election of democrat franklin roosevelt
2:20 now i mentioned in the previous video
2:21 that the president preceding roosevelt
2:23 namely herbert hoover was a conservative
2:25 and so when the stock market crashed and
2:27 the great depression began and all
2:28 turned to doom and gloom hoover's
2:30 conservative position led him to do very
2:32 little to hoover like the market is
2:33 going to correct itself in the long run
2:35 and all shall be well no need to get big
2:37 daddy government meddling in the economy
2:38 that's when john maynard keynes came
2:40 along and rebuked hoover and all who
2:42 thought in similar ways saying in the
2:44 long run we're all dead in other words
2:47 yes the economy will correct itself in
2:49 the long run but there is immense
2:50 suffering now and something must be done
2:52 while people are suffering besides just
2:54 waiting for the resolution of the crisis
2:56 so roosevelt being a good keynesian
2:58 pumped up government spending like a
3:00 boss by providing federal work programs
3:02 and economic safety nets in the form of
3:04 social security now conservatives on the
3:06 other hand want less government
3:07 intervention in the economy to
3:08 conservatives letting the free market
3:10 determine people's choices is a far
3:12 better solution than getting the
3:14 government involved to them this
3:15 position upholds people's freedom to
3:17 make their own economic choices and
3:18 keeps the government from piling up debt
3:20 to pay for all the programs so when it
3:22 comes to fiscal policy conservatives
3:23 want less government programs and lower
3:26 taxes and again conservatives didn't
3:27 just pluck these ideas out of the realm
3:29 of unicorns they do have theoretical
3:31 support for it and it comes in the form
3:33 of supply-side economics if keynesians
3:35 want to address economic woes through
3:36 government spending supply siders want
3:38 to address economic woes by supporting
3:40 businesses the idea here is that if more
3:42 goods are injected into the economy then
3:44 such an action will shore up economic
3:46 turmoil and who produces goods for the
3:48 economy businesses now as you probably
3:50 know the most basic terms of free market
3:52 economics are supply and demand
3:54 businesses supply goods according to the
3:56 demand from the consumers and so that's
3:57 why it's called supply-side economics
4:00 support the supply side of that equation
4:02 which is to say businesses the producers
4:03 of goods and the economy will be good so
4:05 the way conservatives propose to do that
4:07 is by keeping government regulations of
4:09 business to a minimum and lowering taxes
4:11 so that people have more money to spend
4:13 on those goods now i haven't said
4:14 anything about how conservatives and
4:15 liberals view monetary policy and that's
4:17 because it's pretty complicated however
4:19 what you do need to know for your exam
4:21 is this conservatives tend to favor
4:23 using monetary policy to stabilize the
4:25 economy whereas liberals tend to believe
4:26 that monetary policy is too slow to
4:28 affect real change okay now let's talk
4:30 about libertarian ideology and the truth
4:32 is libertarians are strange birds that
4:34 are difficult to classify on the whole
4:36 but since we're talking about economics
4:37 in this video you should know that
4:38 libertarians want the least amount of
4:40 government intervention possible to
4:42 libertarians the only thing the
4:43 government is good for economically
4:45 speaking is to protect personal property
4:47 rights and ensure that nothing hinders
4:49 voluntary trade they want no regulation
4:51 on businesses and minimal government
4:53 programs okay thanks for watching click
4:54 right here to grab review packet which
4:55 is going to help you get an a in your
4:56 class and a 5 on your exam in may if
4:58 this video helped you and you want me to
4:59 keep making them then by all means
5:00 subscribe and i shall oblige i'm out
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