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Chapter 10

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Chapter 10

  1. 1. Chapter 10:The Economics of Government Spending<br />
  2. 2. 10-1: The Economics of Taxation<br /><ul><li> Government Spending in Perspective
  3. 3. Public sector spending was low prior to the Great Depression
  4. 4. Video - The New Deal</li></li></ul><li>John Stossel in the Classroom<br />2008 Pig Book<br />"Fighting for the interests of my constituents“<br />
  5. 5. Two types of government spending<br />Purchase of goods and services <br />Tanks, planes, ships, space shuttle<br />Office buildings, parks, schools<br />Supplies, utilities<br />Employees<br />Transfer payments <br />Can be made to an individual<br />Social Security, Welfare, Medicare, etc.<br />Can be made to another level of government<br />Called a grant-in-aid<br />Necessary for large construction projects<br />
  6. 6. Impact of Government Spending<br />Resource Allocation<br />Redistribution of Income<br />Competition with the Private Sector<br />Increasing the Tax Burden<br />
  7. 7. 10-2: Federal, State and Local Government Expenditures<br />Federal Expenditures<br />Fiscal year or budget year for U.S. Gov’t is 10/1 – 9/30<br />Appropriations bill is an act of Congress that allows federal agencies to spend money for a specific purpose.<br />Mandatory spending is spending authorized by law that continues without the need for annual approvals by Congress, such as Social Security.<br />Discretionary spending must be approved by Congress in the annual budgetary process, such as defense spending.<br />
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  10. 10. 10-3: Deficits, Surpluses and the National Debt<br />Why you should care about the national debt<br />Video - Debt auction<br />Video - Interest on debt<br />Video - Jon Stewart<br />

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