Direct democracy

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Direct democracy is often referred to as pure democracy, and it is a type of democracy in which society decides policy and laws set in effect by the government instead of legislators elected by the citizens (Hussey 256). In a real direct democracy, the citizens of a national vote on all the laws, bills, and court verdicts. Democracy means that there is transparency between the government and the public, as well as greater government accountability. In the state of California, the system of direct democracy began because many Californians were not satisfied with the state government. It is because the government was controlled by wealthy officials who made laws to help them in the businesses instead of the people they represented (Hussey 256).

Direct democracy has a system of initiative and referendums. An initiative is merely a suggestion for a fresh law. If a good number of citizens sign a petition, the proposals then become a proposition and are added to a ballot after which the residents will vote whether they need the policies to turn into regulations (Hussey 257). Similarly, referendum consents the people to poll for or contrary to a rule that has been passed by a state assembly. Any citizen of California is authorized to compose a petition to suggest a new ruling. If a desirable number signs the petition, then it is the obligation of the government to put the proposition on the ballot and give the citizens an opportunity to vote. To bring an initiative or referendum to vote, it must have more than 900,000 votes. California was the first state to permit the use of medicinal marijuana after the implementation of Proposition 215 over twenty years ago. In 2008, the state of California voted on Proposition 8 that was focusing on the marriage between the same sexes (Hussey 258).

Question 2

Public policy is the actions undertaken by the administration including its decisions that are aimed to solve issues to increase the worth of life of its residents (Birkland). Federal strategies are ratified at the federal level to regulate businesses and industries to protect citizens in the country and outside the country (Birkland). A system put in place by an administration undergoes numerous phases starting from the commencement to the conclusion. The steps of the policy making process of the federal government include;

Agenda Building

Before the creation of a system, a challenge must be present and called to the attention of the federal administration (Birkland). For instance, unlawful immigration has been taking place for several years, but it was not up to the a few years ago that most people began considering it a grave issue that necessitated augmented government act. Another case in point is criminality. The people of America tolerate evil to a certain level, and when the crime rises dramatically, it becomes a concern of policy makers (Birkland).

Formulation and Adoption

The process involves initiating a method to resolving a problem. Congress, the judiciary, executive division and the groups that are interested can participate in the process. The head of state might have one tactic to an individual issue, and the opposition party might have another method (Kingdon).


The process of application is often undertaken by associations different from those that framed and adopted it. A decree is there to provide a comprehensive framework of a rule. For instance, Assembly may order better water quality, but it is the obligation of the Environmental Protection Agency (EPA) to offer facts of required principles and measures (Kingdon).

Evaluation and Termination

The process of the assessment includes defining how well a rule is functioning. Individuals in the government and outside the regime use cost benefit scrutiny to find the answer. According to history, once the policies have implemented, their termination is often difficult. When the plans are concluded, it is because they became superseded or lost interest among the interest groups that proposed it in the first place (Kingdon).

Question 3

Before 1978, when institutes required cash to hire scholars, pay for schoolrooms and provisions, they only looked on the local taxpayer for cash in the form of assets duties (Hoene 53). However, after 1978, that could not be done anymore. Beforehand Proposition 13, the learning institutions in California state $ 9 billion budget. After the proposal, they lost $ 3 billion which is a third of the budget. The majority of funding for schools comes from the state from a series of ballot initiatives. It is evident that the last time the state of California was at the topmost of national ranking in 1965 when it ranked 5th (Hoene 57). In 1978 the year Proposition 13 approved, the state was ranked 14th out of 50. The following year, the state was ranked the 22nd place, and it fell below the nationwide average in 1988 never to recover again.

The drop in the national ranking is connected to the passage of Proposition 13 in that revenue limits were placed on schools and indeed condensed the pool of cash that was offered to schools (Hoene 64). It is because the state relies on sales tax and income tax hence in case of recession like the one that is currently witnessed, the state is left with less money, and in turn, they are compelled to give the schools less money. Therefore, it indicates that proposition should be repealed since it is obvious it has become obsolete concerning the current performance of the schools and the economic situation of the country (Hoene 70).

Question 4

The decline of the economy for at least six months in a row is what is called the economic recession. It means there is a drop in various economic indicators such as GDP, income employment, retail sales, and manufacturing. Solving these issues calls for some economic policies such as the Keynesian solution to the recession and the role of the Federal Reserve Bank to be put into consideration.

Keynesian Solution

According to Keynesians, the government is supposed to spend more and tax less during bad economic times (Dorman 269). Through this, the government puts money in the hands of the consumers. It because recession and depression are caused by lack of enough aggregate demand (AD) and increasing the AD is likely to get the economy out of the slump down. For instance, the government pays people to things like constructing roads and the money that is spent by the government will multiply and have a larger impact on the level of the AD (Dorman 272).

For example, if the government spends $ 200 million on road construction, the people that the money falls into their hands will save some amount and will be compelled to pay most of it. Maybe the businesses will have gotten $ 90 million if people if people kept 10%. The company will save some of that but will also be compelled to spend more. The process keeps recurring over and over, and the first government spending is multiplied several times. The approach makes the AD curve to shift to the right, and the GDP in turn rises (Dorman 283).

Role of Federal Reserve Bank

It is the obligation of the Federal Reserve Bank to respond to the economic unrest in the country since they were mandated by the Congress in 1913 to offer the nation with a safer and unwavering monetary structure (Mishkin 118). The FED responds during the economic crisis by implementing some programs that aim to backing the liquidity of monetary organizations and foster better settings in monetary markets. The FED includes substantial purchases of longer term securities that seek to put down stress on longer term interest charges and to simplify economic conditions overall (Mishkin 123).

During the recession, the bank is supposed to provide short-term liquidity to banking institutions and other relevant financial organizations. Due to the reason that the bank funding markets is a global scale affair, the Federal Reserve likewise approves mutual currency swap pacts with different overseas central banks. Similarly, the Reserve Bank provides liquidity directly to investors and borrowers in credit markets that are critical (Mishkin 125).

Mistakes of the Federal Reserve Bank

Despite these policies that the Federal Reserve put in place during the economic recession, it is important to point out errors that they made in the past concerning the depression (Meltzer). Most people tend to point fingers on housing, market but in the real sense it is due to misguided monetary policies of the Federal Reserve. The Fed concentrated on resolving the accommodation crisis as the economy began to fall in 2008 not knowing that the crisis was merely a disruption. One cannot deny that housing crisis on its own might have instigated a weak downturn (Meltzer).

However, the Fed bailed out the banks at risk of bad mortgages ignoring the cause of the real downturn. A fall in GDP that counts for the total worth of properties and services in the country failed to be put into consideration by the Reserve Bank while going assessing inflation. The Fed has the mandate to control NGDP through its financial rules, and it was supposed to lower the interest rates rapidly instantly. Besides, it should have increased the supply of money with the help of quantitative easing. Instead of doing that, Fed kept interest rates too high for long hence triggering the GDP even to fall further (Meltzer).

Works Cited

Birkland, Thomas A. An introduction to the policy process: Theories, concepts and models of public policy making. Routledge, 2014.

Dorman, Peter. “Keynesian Fiscal Policy.” Macroeconomics. Springer Berlin Heidelberg, 2014. 267-291.

Hussey, Wesley. “Direct Democracy in California.” (2008): 256-258.

Hoene, Christopher. “Fiscal Structure and the Post‐Proposition 13 Fiscal Regime in California’s Cities.” Public Budgeting & Finance 24.4 (2004): 51-72.

Kingdon, John W. Agendas, alternatives, and public policies. Longman Pub Group, 2003.

Mishkin, Frederic S. “Why the Federal Reserve should adopt inflation targeting.” International Finance 7.1 (2004): 117-127.

Meltzer, Allan H. A History of the Federal Reserve, Volume 2. University of Chicago Press, 2010.

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