US Budgeting

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  • Wendell Bravo god creation the wonders of the earth (3:16 god gave it begotten son that who ever believe in son of god jesus christ will have the everlasting life) game begin>>>>>>>the garden of eden the devil/satan/tabernacle union of sun and moon zeus (the woman)(strength)>>>>adan and eve/cain and abel<<<<<<<<<<<<<<got the game <<<<<<<<<<<<<21st century information technoly the future beyond this .amen.
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  • USA Datamonitor report (Graph and Pie chart)GDP Figures – Economic Times reportGDP Definition -
  • USA Datamonitor report (Graph and Pie chart)GDP Figures – Economic Times reporthttp://www.economist.com/blogs/freeexchange/2010/08/china_0GDP Definition -
  • Inflation rate:http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=USD
  • http://useconomy.about.com/od/howtheeconomyworks/u/how-does-us-economy-work.htm (Definition)http://www.ustr.gov/webfm_send/1673 (Main focus)http://www.ustr.gov/about-us/press-office/press-releases/2010/march/kirk-comments-2010-trade-policy-agenda (Highlights)United States Trade Representative
  • http://usa.usembassy.de/economy-policy.htmhttp://useconomy.about.com/od/fiscalpolicy/p/deficit.htmhttp://useconomy.about.com/od/fiscalpolicy/p/Budget_Spending.htmhttp://useconomy.about.com/od/fiscalpolicy/p/Budget_Income.htmhttp://useconomy.about.com/od/fiscalpolicy/p/US_Debt.htm
  • http://usa.usembassy.de/economy-policy.htmLow interest rates , high money supply http://italy.usembassy.gov/pdf/other/RL30354.pdfhttp://www.tradingeconomics.com/Economics/Interest-Rate.aspx?Symbol=USD (Interest Rate chart)http://www.economicsjunkie.com/true-money-supply/ (Money supply chart)
  • During FY 2009, the federal government collected approximately $2.1 trillion in tax revenue. Primary receipt categories included individual income taxes (43%), Social Security/Social Insurance taxes (42%), and corporate taxes (7%).[6] Other types included excise, estate and gift taxes. Tax revenues have averaged approximately 18.3% of gross domestic product(GDP) over the past 40 years, generally ranging plus or minus 2% from that level.[7]Tax revenues are significantly affected by the economy. Recessions typically reduce government tax collections as economic activity slows. For example, during FY2009, the U.S. government collected about $400 billion less than FY2008. Individual income taxes declined 20%, while corporate taxes declined 50%. At 15% of GDP, the 2009 collections were the lowest level of the past 50 years.[8]http://en.wikipedia.org/wiki/United_States_federal_budget#Major_receipt_categories
  • During FY 2009, the federal government spent nearly $3.52 trillion on a budget or cash basis, up 18% versus FY2008 spend of $2.97 trillion. Primary expenditure categories (shown in the pie chart in the introduction above) include: Defense and Homeland Security ($782B or 23%), Social Security ($678B or 20%), and Medicare &amp; Medicaid ($676B or 19%). Expenditures are classified as mandatory, with payments required by specific laws, or discretionary, with payment amounts renewed annually as part of the budget process.[6]Over the past 40 years, mandatory spending for programs such as Medicare and Social Security has grown as a share of the budget, while defense grew around 9% per year excluding war costs and other discretionary categories have declined. Between 1966 and 2006, Medicare and Social Security grew from 16% of the budget to 40%. Discretionary outlays, which rely on annual appropriations for funding, accounted for 38.0% of total federal outlays in FY2008.http://en.wikipedia.org/wiki/United_States_federal_budget#Major_receipt_categories
  • http://en.wikipedia.org/wiki/Fiscal_policy_of_the_United_States (Eplanation)http://www.usgovernmentspending.com/downchart_gs.php?year=1960_2015&amp;view=1&amp;expand=&amp;units=b&amp;fy=fy11&amp;chart=G0-fed&amp;bar=1&amp;stack=1&amp;size=l&amp;title=&amp;state=US&amp;color=c&amp;local=s
  • http://en.wikipedia.org/wiki/Fiscal_policy_of_the_United_States
  • http://en.wikipedia.org/wiki/Fiscal_policy_of_the_United_States
  • http://www.usgovernmentspending.com/downchart_gs.php?year=1960_2015&amp;view=1&amp;expand=&amp;units=b&amp;fy=fy11&amp;chart=G0-fed&amp;bar=1&amp;stack=1&amp;size=l&amp;title=&amp;state=US&amp;color=c&amp;local=s
  • http://en.wikipedia.org/wiki/Government_debthttp://en.wikipedia.org/wiki/DeficitGross debt includes not only bonds and liabilities tobanks, but also liabilities to non-banks from promissorynotes, lease liabilities, liabilities arising from ABStransactions (capital marketliabilities), liabilitiesfromderivatives and cash collateral received for positive fairvalues of derivatives, as well as other interest-bearing(Social Security Trust Funds ) financial liabilities.
  • GDP is a measure of the total size and output of the economy. One measure of the debt burden is its size relative to GDP. In fiscal 2007, U.S. public debt was approximately $5 trillion (36.8 percent of GDP) and total debt was $9 trillion (65.5 percent of GDP.)[61] Public debt represents money owed to those holding government securities such as Treasury bills and bonds. Total debt includes intra-governmental debt, which includes amounts owed to the Social Security Trust Funds (about $2.2 trillion in FY 2007)[62] and Civil Service Retirement Funds. By August 2008, the total debt was $9.6 trillion.[63]Based on the 2010 U.S. budget, total national debt will nearly double in dollar terms between 2008 and 2015 and will grow to nearly 100% of GDP, versus a level of approximately 80% in early 2009.[64] Multiple government sources including the current and previous presidents, the GAO, Treasury Department, and CBO have said the U.S. is on an unsustainable fiscal path.[65] As the debt ratio increases, the exchange value of the dollar may fall. Paying back debt with cheaper currency could cause investors (including other governments) to demand higher interest rates if they anticipated further dollar depreciation. Paying higher interest rates could slow domestic U.S. growth.Higher debt increases interest payments on the debt, which already exceed $430 billion annually as discussed below, or about 15 cents of every tax dollar for 2008.[66] According to the CIA Factbook, only six other countries have debt to GDP ratios over 100% for 2008, the largest of which is Japan at 170%.[67]Further, a high public debt to GDP ratio may also slow economic growth. Economists Carmen Reinhart and Kenneth Rogoffcalculated that countries with public debt above 90 percent of GDP grow by an average of 1.3 percentage points per year slower than less debt-ridden countries. The public debt-to-GDP ratio in March 2010 is about 60 percent of GDP; CBO projects it will reach 90 percent around 2020 under policies in place in 2010. If growth slows, all of the economic challenges the U.S. faces will worsen.[68]Historical analysis of government spending or debt relative to GDP can be misleading, according to the GAO, CBO and Treasury Department. This is because demographic shifts and per-capita spending are causing Social Security and Medicare/Medicaid expenditures to grow significantly faster than GDP. If this trend continues, government simulations under various assumptions project mandatory spending for these programs will exceed taxes dedicated to these programs by more than $40 trillion over the next 75 years on a present value basis.[69]According to the GAO, this will double debt-to-GDP ratios by 2040 and double them again by 2060, reaching 600 percent by 2080.[70] A GAO simulation indicates that Social Security, Medicare, and Medicaid expenditures alone will exceed 20% of GDP by 2080, which is approximately the historical ratio of taxes collected by the federal government. In other words, these mandatory programs alone will take up all government revenues under this simulation.[69]
  • http://www.chinadaily.com.cn/bizchina/2010-03/01/content_9518437.htmIssue of Treasury BillsRaise taxes – to pay their billsPrint the money – as in the Weimar Republic in Germany after the World War IITo borrow money, govermentsSell off (Privatize) National assets such as telecommunications, water systems, rail or transportation systems or real estate.Raise taxes - The Govt should cut some spending and raise some revenue while avoiding extremes in either direction,Printing excess money – this leads to excess money chasing less goods which will ultimately leads to inflation.Repudiate the debt Reduce the spending on Medicare and Social Security.AsGovt.fundshigherandhigherdeficitsInterestratesstarttoriseIncasethisissubscribedbydomesPcpublicandinsuranceco’s/PensionFundssPllnotaproblemSell off (Privatize) National assets such as telecommunications, water systems, rail or transportation systems or real estateRepudiate the debt – as Russia did with $110 billion in 1917Resort the Plunder – by launching wars to acquire wealth to pay off their debts
  • http://www.chinadaily.com.cn/bizchina/2010-03/01/content_9518437.htmIssue of Treasury BillsRaise taxes – to pay their billsPrint the money – as in the Weimar Republic in Germany after the World War IIAsGovt.fundshigherandhigherdeficitsInterestratesstarttoriseIncasethisissubscribedbydomesPcpublicandinsuranceco’s/PensionFundssPllnotaproblemSell off (Privatize) National assets such as telecommunications, water systems, rail or transportation systems or real estateRepudiate the debt – as Russia did with $110 billion in 1917Resort the Plunder – by launching wars to acquire wealth to pay off their debts
  • With respect to entitlement spending, the nation must change course before the deficit and debt reachunprecedented heights. The Government must act to bring social insurance expenses and resources in balance.Delays will increase the magnitude of the reforms needed and will place more of the burden on future generations.There is no simple fix to the projected imbalance between social insurance expenditures and revenues. The preciseamount of the Government’s future financial responsibilities is far from certain, as they are based on many complexcalculations and assumptions. Nevertheless, the magnitude of these responsibilities and the pressing need to controltheir continued growth are evident.The Government has made and is expected to continue to make a vast commitment of financial resources toestablish and maintain stability in the credit markets. The Government expects that at least some of the financialassets acquired by the Government in its market stabilization efforts may eventually return full value to the taxpayerand possibly even earn a positive return on amounts spent as economic conditions improve. The Governmenthas been able to take these stabilization actions because of the deep, liquid market for Treasury securities. Theunsustainable growth in Social Security, Medicare, and Medicaid remains a long-term fiscal challenge to beaddressed once the current credit crisis has passed and overall economic conditions have improved.
  • http://www.chinadaily.com.cn/bizchina/2010-03/01/content_9518437.htmIssue of Treasury BillsRaise taxes – to pay their billsPrint the money – as in the Weimar Republic in Germany after the World War IIAsGovt.fundshigherandhigherdeficitsInterestratesstarttoriseIncasethisissubscribedbydomesPcpublicandinsuranceco’s/PensionFundssPllnotaproblemSell off (Privatize) National assets such as telecommunications, water systems, rail or transportation systems or real estateRepudiate the debt – as Russia did with $110 billion in 1917Resort the Plunder – by launching wars to acquire wealth to pay off their debts
  • http://marcfaberchannel.blogspot.com/2010/06/marc-faber-us-national-debt-is-already.html investment analyst and fund manger
  • US Budgeting

    1. 1. `<br />1<br />USA<br /> DEFICIT <br />TRADE DEFICIT <br />FISCAL<br />&<br />
    2. 2. 2<br />Index<br />1<br />Overview of the US economy<br />1<br />2<br />Trade Deficit<br />3<br />Budget Deficit<br />4<br />Conclusion<br />
    3. 3. 3<br />Index<br />INTRODUCTION<br />1<br />Overview of the US economy<br />1<br />2<br />Trade Deficit<br />3<br />Budget Deficit<br />4<br />Conclusion<br />5<br />
    4. 4. 4<br />Overview<br />TRADE POLICY<br />GDP<br />INFLATION<br />FISCAL POLICY<br />MONETARY POLICY<br />
    5. 5. 5<br />GDP<br />INFLATION<br />TRADEPOLICY<br />FISCAL POLICY<br />MONETARY POLICY<br />GDP<br /><ul><li>The current GDP of US is $14.2 trillion which is 22.9% of world GDP ($ 61.06 Trillion ) – for 2009
    6. 6. Out of the $14 trillion, $10 trillion of US GDP is used for personal consumption
    7. 7. USA is the World’s largest economy followed by China at $1.337 trillion, to Japan's $1.288 trillion </li></ul>Composition of GDP from different sectors of the economy<br />
    8. 8. Inflation<br />6<br />INFLATION<br />TRADEPOLICY<br />FISCAL POLICY<br />MONETARY POLICY<br />GDP<br /><ul><li>Inflation is when the prices of most goods and services continue to creep upward. It is measured by the Consumer Price Index
    9. 9. Inflation Rate in 2010 is 1.20%
    10. 10. US is exporting inflation to the rest of the world , misusing their status as the reserve currency of the world</li></li></ul><li>Trade Policy<br />INFLATION<br />TRADE POLICY<br />FISCAL POLICY<br />MONETARY POLICY<br />GDP<br />Trade policy affects the cost of imports and exports by regulating trade agreements with other countries.<br />Critical creation of American exports and Support of new American jobs<br />Main Focus<br />2010 Trade Policy<br />Sustainable economic growth<br /><ul><li>Support and strengthen a rules-based trading system
    11. 11. Enforce American rights in the rules-based trading system
    12. 12. Enhance U.S. growth, job creation and innovation
    13. 13. Work to resolve outstanding issues with pending FTAs and build on existing agreements
    14. 14. Facilitate progress on national energy and environmental goals
    15. 15. Foster Stronger Partnerships with Developing and Poor Nations
    16. 16. Reflect American values in trade policy</li></ul>Highlights Policy Agenda include key commitments to<br />7<br />
    17. 17. Fiscal Policy<br />8<br />INFLATION<br />TRADE POLICY<br />FISCAL POLICY<br />MONETARY POLICY<br />GDP<br />Fiscal Policy determines the appropriate level of taxes and spending in a country. The president and Congress adjust federal spending and taxes in the US.<br />The US Debt is $13 trillion, largest in the world<br />The U.S. Government's total revenue is estimated at $2.6 trillion for year 2011.<br />For the year 2011, Federal spending is budgeted at $3.8 trillion.<br />In FY 2011 the deficit is projected to be $1.26 trillion, the difference between $3.83 trillion in spending and $2.57 trillion in revenue. <br />Although this deficit is huge, it is less than the $1.6 trillion deficit in FY 2010.<br />
    18. 18. Monetary Policy<br />9<br />INFLATION<br />TRADE POLICY<br />FISCAL POLICY<br />MONETARY POLICY<br />GDP<br />The Federal Reserve manages the monetary policy i.e. the money supply and use of credit.<br />The use of national currency as the global reserve currency leads to tension between the national monetary policy and the global monetary policy. <br />Measure of monetary policy: Money supply Growth and Interest Rate<br />True Money Supply (1959 – 2008)<br />United States Interest Rates<br />
    19. 19. 10<br />Index<br />TRADE DEFICIT<br />1<br />Overview of the US economy<br />1<br />2<br />Trade Deficit<br />3<br />Budget Deficit<br />4<br />Conclusion<br />5<br />
    20. 20. Trade Deficit<br />TRADE DEFICIT<br />Imports<br />Exports<br />Causes :<br /><ul><li>Failed trade policy – Less production against high demand
    21. 21. Instability of the government
    22. 22. High prices of goods manufactured within the country</li></ul>Implication :<br /><ul><li>Unemployment
    23. 23. The country starts depending on foreign sources
    24. 24. Value of the currency might fall below equilibrium </li></li></ul><li>US dollar Strengthened against other currencies<br /> Imports were almost free of cost.<br />This increased the TRADE deficit<br />After the collapse of Bretton woods, USA started misusing it’s status as a reserve currency and started printing notes<br />
    25. 25. The Current Scenario<br /><ul><li> Total Imports of $196 Billion and Total Exports of $153 Billion , leaving a deficit of $43 Billion
    26. 26. In July10’, export of goods increased $2.8 billion to $107.7 billion and import of goods decreased $4.2 billion to $162 billion
    27. 27. Trade deficit increased by $9.7 billion from June09’ to July10’
    28. 28. Decrease occurred in import of consumer goods, automotive parts, capital goods and foods, feeds and beverages
    29. 29. Increase occurred in exports of industrial supplies, capital goods and automotive engines and parts</li></li></ul><li>China<br />Canada<br />Mexico<br />Japan<br />Germany<br />Major Countries from which US is Importing<br /><ul><li>Office and automatic data processing machines
    30. 30. Telecommunications
    31. 31. Furniture</li></ul>19.3%<br /><ul><li>Petroleum
    32. 32. Motor vehicles and parts
    33. 33. Industrial machinery
    34. 34. Timber, & Fertilizers</li></ul>14.24%<br />11.12%<br /><ul><li>Fruits & Vegetables
    35. 35. Coffee
    36. 36. Cotton</li></ul>6.14%<br />4.3%<br /><ul><li>Civilian airplanes / helicopters
    37. 37. Passenger automobiles
    38. 38. Controllers & Processors
    39. 39. Motor Vehicle Parts
    40. 40. Cardiovascular medications
    41. 41. Large & mid sized automobiles</li></li></ul><li>15<br />
    42. 42. Major Imports and exports of USA <br />Top 5 IMPORTS<br /><ul><li> Crude Oil
    43. 43. Pharmaceutical Preparations
    44. 44. Household Goods
    45. 45. Computer and Computer Accessories
    46. 46. Apparels </li></ul>Top 5 EXPORTS<br /><ul><li> Semi Conductors
    47. 47. Pharmaceutical Operations
    48. 48. Industrial machines
    49. 49. Civilian Aircrafts
    50. 50. Telecommunication equipments</li></li></ul><li>Service Trade Balance of USA Vs Other Countries<br />Service Trade Balance : Export of services minus Import of Services<br />US<br />UK<br />EA<br />IND<br />CHN<br />BRA<br />RUS<br />JPN<br />
    51. 51. Goods Trade Balance of USA Vs Other Countries<br />Trade Balance : Export of Goods minus Import of Goods<br />CHN<br />JPN<br />BRA<br />IND<br />UK<br />US<br />
    52. 52. 19<br />Index<br />FISCAL DEFICIT<br />1<br />Overview of the US economy<br />1<br />2<br />Trade Deficit<br />3<br />Budget Deficit<br />4<br />Conclusion<br />5<br />
    53. 53. 20<br />Fiscal Policy<br />PRIMARY DEFICIT<br />Current Government spending <br />Total current revenues from all taxes<br />Government Spending <br />TOTAL DEFICIT<br />Total tax revenues<br />Interest payments on debts <br />GOVERNMENT DEBTS<br />Budgetary deficits when accrued for a very long<br />
    54. 54. Revenue<br />21<br />NOTE: <br /><ul><li>Recession reduced government tax collection by $ 400 billion less than FY 2008
    55. 55. Tax collection was 15% of GDP which was the lowest level in the past 50 years.
    56. 56. Decline in Tax for Individual Tax ( by 20%) & Corporate Tax ( 50%)</li></li></ul><li>Expenditure <br />22<br />& Homeland Security<br />Social Security <br /> Medicare expenditures<br />Military spending<br />Interest expense<br />NOTE: <br /><ul><li>Increase in Expenditure by 18% from FY 2008</li></li></ul><li>Fiscal Deficit over a Period of 50 Years<br />23<br />
    57. 57. History of Fiscal Deficit<br />2005<br /><ul><li>In fiscal year 2005, the deficit began to shrink due to a sharp increase in tax revenue.
    58. 58. Government spending in defense increased and a $1.35 trillion tax cut, the budget returned to a deficit basis free-falling from a $236 billion in 2000 to a $413 billion deficit in fiscal year 2004. </li></ul>After September 11 attacks<br /><ul><li>The surplus nearly doubled to $125 billion, and then again in 2000 to $236 billion.</li></ul>1999<br /><ul><li> However, gross revenues exceeded expenditures and a surplus resulted in $69 billion.
    59. 59. 1st Surplus since the collapse of the Breton woods</li></ul>1998 - 2001<br /><ul><li>This pattern broke from fiscal years1970 to 1997
    60. 60. Federal budget deficit accelerated, topping out $290 billion in 1992. </li></ul>1970 - 1997<br /><ul><li>The budget for 20th century followed a pattern of deficits during wartime / economic crises and  surplus during peacetime economic expansion</li></ul>20th Century<br />
    61. 61. Explanation<br />History of Fiscal Deficit<br />2010<br /><ul><li>Fiscal deficit is $1.56trn.
    62. 62. As a result of this, in fiscal year 2008, the deficit increased to $455 billion and will increase in years to come due to recession and high spending fiscal policy.</li></ul>2008<br /><ul><li>The economy entered into recession as a result of high oil and food prices, and a sustainable credit crisis leading to the bankruptcy.
    63. 63. In an attempt to fix these economic problems, the United States federal government has passed a series of costly economic stimulus such as reduction in taxes and spending more on social security.</li></ul>2007-2008<br />2007<br /><ul><li>The deficit was reduced to $161 billion and the budget appeared well on its way to balance once again.</li></ul>25<br />
    64. 64. Short Term Fiscal Deficit<br />26<br />
    65. 65. Fiscal Deficit and Government Debt<br />27<br />BUDGET DEFICIT<br />Occurs when an entity spends more money than it takes in.<br />GOVERMENT DEBT<br />Accumulated Governmental Deficit over several years is referred to as the Government Debt.<br />NATIONAL DEBT<br />GOVERMENT DEBT<br />PUBLIC DEBT<br />Money owed to those holding government securities + <br />Intra-governmental debt<br />OR<br />GOVERMENT DEBT<br />Considers all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid<br />
    66. 66. Total Debt Vs Debt Relative to GDP(%)<br />28<br />NOTE: <br /><ul><li>As the debt ratio increases exchange value of the dollar may fall
    67. 67. Paying back debt with cheaper currency could cause investors to demand higher interest rates if they anticipated further dollar depreciation.
    68. 68. Paying higher interest rates could slow domestic U.S. growth.</li></li></ul><li>29<br /> Balancing Fiscal Deficit<br />Sell off (Privatize) National assets<br />Issue of Treasury Bills<br />Raise Taxes<br />Methods of Balancing Fiscal Deficit <br />Printing excess money<br />Resort the Plunder – by launching wars to acquire wealth to pay off their debts<br />Repudiate the debt <br />
    69. 69. 30<br /> Balancing Fiscal Deficit<br />Issue of Treasury Bills/ Government Securities<br /><ul><li>U.S. Treasury securities are issued to finance the federal budget deficit. Of the public debt that is privately held, about half is held by foreigners
    70. 70. China held $1.8 trillion in Treasury Bonds
    71. 71. Print Money
    72. 72. The Reduce spending on Medicare and Social Security
    73. 73. Resort the Plunder – by launching wars to acquire wealth to pay off their debts</li></li></ul><li>Preparing For Future<br />31<br />Delays will magnitude of reforms needed & will place burden on future generations<br />The unsustainable growth in Social Security & Medicare remains a long-term fiscal challenge to be addressed<br />The Government has to make a vast commitment of financial resources to<br />establish & maintain stability in the credit markets<br />The Government must act to bring social insurance expenses & resources in balance<br />The nation must change course before the deficit & debt reach<br />unprecedented heights. <br />
    74. 74. Balancing Fiscal Deficit<br />
    75. 75. 33<br />Click to view Video<br />
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