Economics. Chapter 10 – Government Spending. Objectives. Explore the role of the federal government in our economy. Analyze government spending. Assess federal, state, and local government expenditures. Identify the reasons behind our national debt.
Chapter 10 – Government Spending
Explore the role of the federal government in our economy.
Analyze government spending.
Assess federal, state, and local government expenditures.
Identify the reasons behind our national debt.
Predict the state of our national debt in the future.
GOODS AND SERVICES
GOODS AND SERVICES
Term used by some to describe a line-item budget expenditure that circumvents normal budget-building procedures.
GOVERNMENT ART THAT SOOTHES THE SOUL
Memphis is known for rhythm and blues, but it recently gained another moniker. In 2009, Forbes named Memphis the second most dangerous city in America.40 How have city leaders decided to fight crime? By spending $700,000 on government-funded art to scatter around the city, of course.41 In February 2010, a committee of the Memphis City Council approved a plan to give the Urban Art Commission the funding to erect murals and sculptures throughout the city. Apparently, the plan is to woo criminals with such breathtaking artwork that they immediately give up their wicked ways. It remains to be seen how well that works.
Form of goods and services.
Transfer payment – a payment for which the govt receives neither goods nor services in return – Social Security, unemployment, welfare
Grant –in-Aid – a transfer payment that one level of govt makes to another – example interstate highway construction
Federal Budget – annual plan outlining proposed revenues and expenditures for the coming year.
Fiscal Year – 12 month period from October 1st to September 30th
Appropriations Bill – act of Congress that allows federal agencies to spend money for a specific purpose
Budget Deficit – a excess of expenditures over revenue
Budget Surplus – revenues are more than expenditures
Mandatory Spending – spending authorized by law that continues without need for annual approval by Congress (ex. Social Security payments)
Discretionary Spending – spending that must be approved annually by Congress (defense expenditures)
Income Security– SSI, subsidized housing, welfare, food stamps
Medicare – health care program available to all senior citizens regardless of income – available at age 65
Medicaid– joint federal-state medical insurance program for low income individuals (TennCare in TN)
Net Interest on Debt– from borrowed monies
Intergovernmental Expenditures – ex. sales tax to be paid to a county or city
Insurance Trust and Retirement– example, teachers
Public Safety and Health
CURRENT US SAVINGS RATE