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16 How The Government Spends Your Money
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  • 1. How the Government Spends your Money Objective: Analyze how the government manages the money of the U.S. Taxpayer
  • 2. Government Growth
    • Government has grown considerably in the last 70 years
    • In 1929 government at all levels employed 3 million people
    • Today, the government at all levels employ 20 million people a six fold increase!!!
  • 3. Why has the Government Grown
    • Some say need, because of national urgency during the Great Depression and WWII
    • Some say because we became richer and demanded more government services
  • 4. Is Government Growth Good or Bad?
    • That depends, government taxing and spending as opportunity costs
    • Government activity displaces private economic decisions
    • Private decision making is at the heart of wealth creation and a rising standard of living for all citizens
  • 5. Functions of Government
    • 1. To provide public goods (Police, Fire, and Military protection
    • 2. Redistribute income (Tax the rich and give it to the poor)
    • 3. Regulate economic activity (Ensure a fair playing field)
    • 4. Ensure economic stability ( minimize the ups and downs)
  • 6. How the Government Spends your Money
    • The national government spends almost half 48% of your taxes on entitlement programs
    • Next runner up is the military at 18%
    • Finally 14% is spent on interest on the national debt
  • 7. Government Spending
    • When the government spends more money then it takes in this is called
    • Deficit Spending
    • When we deficit spend the national debt grows!!!
  • 8. National Debt
  • 9. Taxes
    • Proportional Taxes- is a tax that takes the same percentage of all incomes
    • Progressive Tax- Takes a larger percentage of higher incomes than lower incomes
    • Regressive Tax- Takes a larger percentage of lower incomes than higher incomes
  • 10. Review
    • What are the functions of government?
    • Ans. Provide public goods, redistribute income, regulating economic activity, and ensure economic stability
    • Name the three different types of Taxes
    • Ans. Proportional, Progressive, and Regressive
    • What is deficit spending?
    • Ans. When the government spends more then it takes in