+ Welcome C&E Students!!! Would you rather defend yourself against an army of Smurfs or an army of Carebears?

+ Mental Floss Objective: 7.2 – Evaluate how the government collects and distributes tax revenue. Vocab: Budget Fiscal year Office of Management and Budget Budget Resolution Mandatory Spending Discretionary spending Entitlement Programs Deficit Debt Questions: 1. What are the 4 different types of economies? 2. How does a mixed economy differ from a capitalist economy?

+ Mental Floss Answers 1. What are the 4 different types of economies? The 4 different types of economies are traditional, capitalist, command, and mixed. 2. How does a mixed economy differ from a capitalist economy? A mixed economy differs from a capitalist economy due to the fact that the government has some involvement in a mixed economy.

+ Reminders Budget Project Due one week from today!!! Unit 7 Test will be on 12/16 If you are missing an assignment, quiz or test in the grade book, you need to come see me ASAP to work out a plan to make up.

+ Reading – Gov’t Spending Read the Section Outlining Discretionary & Mandatory Spending How are these two different? What are some examples of each?

+ 7.2 – Revenue and Expenditures of the Gov’t Objective: Evaluate how the government collects and distributes tax revenue

+ I. The Government’s Budget A. Each year the president and Congress create a budget – blueprint of how the government will raise and spend money 1. Fiscal Year – a 12 month period that may or may not match the calendar year 2. Begins Oct. 1 and ends Sep. 30 of the following year

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+ B. Budget Process 1. President sends a budget to Congress outlining how the government should spend its money a. Office of Management and Budget- office within the Federal Bureaucracy (Executive Branch) whose function is to assist the President to prepare the budget

+ 2.Congress then passes a budget resolution a. document totaling revenues and spending for the year b. sets targets for how money will be spent in various categories

+ 3. Spending is divided into two types: a. Mandatory Spending – spending that does not need annual approval (1). Examples: Social Security Benefit Checks and interest payments on the government debt. b. Discretionary Spending – expenditures that must be approved each year (1). Examples: Money for highway construction and military/defense.

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+ If these are considered laws that the House and Senate attempt to pass, then what must be the next step after each chamber has approved the appropriation bill? c. Must be approved by both chambers and then signed into law or vetoed by the President d. Current annual budget is near $4 trillion

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+ C. Budget Breakdown 1. Entitlement programs – social security, Medicare and Welfare – 50% of the budget 2. Defense – 20%, 3. interest on debt 8- 9%

+ D. Borrowing 1. Deficit – spending above revenue ($1.5 trillion) 2. Debt – money borrowed and not paid back a. total debt: over $18 trillion, that’s over $300 billion in interest

+ How Quickly Does the Debt Grow? Let’s find out