3. Public sector spending was low prior to the Great Depression
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5. Two types of government spending Purchase of goods and services Tanks, planes, ships, space shuttle Office buildings, parks, schools Supplies, utilities Employees Transfer payments Can be made to an individual Social Security, Welfare, Medicare, etc. Can be made to another level of government Called a grant-in-aid Necessary for large construction projects
6. Impact of Government Spending Resource Allocation Redistribution of Income Competition with the Private Sector Increasing the Tax Burden
7. 10-2: Federal, State and Local Government Expenditures Federal Expenditures Fiscal year or budget year for U.S. Gov’t is 10/1 – 9/30 Appropriations bill is an act of Congress that allows federal agencies to spend money for a specific purpose. Mandatory spending is spending authorized by law that continues without the need for annual approvals by Congress, such as Social Security. Discretionary spending must be approved by Congress in the annual budgetary process, such as defense spending.
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10. 10-3: Deficits, Surpluses and the National Debt Why you should care about the national debt Video - Debt auction Video - Interest on debt Video - Jon Stewart
![10-1: The Economics of Taxation ,[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)