Where your money goes Chapter 10.2 & 10.3

Budget Simulation Recap What did you feel you learned from the process? Was it difficult to balance the budget? What do you think the president and congress should do to balance the budget in real life?

Funding Recap Federal Funding State Funding Local Funding Individual Income Tax Social Security Taxes (FICA) Corporate Income Tax State Funding Intergovernmental Revenue Sales Tax Local Funding Property Tax Other

Government Expenditure What does the government spend money on?

Federal Budget 2016 Federal budget is $3.999 Trillion $3.525 trillion in revenue $474 billion deficit Deficit vs. debt?

Deficit vs. Debt Fiscal year 10/1 – 9/30 Why? Deficit – fiscal year short fall Debt- many years of running a deficit Budget Deficit vs. Budget Surplus

US National Debt Current debt is $16.8 Trillion We add about $3.8 billion a day If spread out, about $53,260.41 (or so) Per capita Total debt is 75% of GDP http://www.usdebtclock.org/

Budget Process

Budget Expenditures Federal Spending State Spending Local Spending Social Security Defense Medicare State Spending Intergovernmental Expenditure Public Welfare Unemployment Local Spending Elementary and Secondary Education Other Utilities

How do we get out of debt?

Deficit Spending Crowding-out Effect

Government solutions “Pay as you go” Line Item Veto Spending caps Reduction in entitlements