Warm-up: Why was the first computer developed? Who made the first successful commercial computer? What happened to the labor unions because of globalization and the US service economy?

The U.S. 21st-Century The Economy

Government & Economy Each year the government collects taxes and uses that money to provide services across the nation and globe If the government spends more than it takes in, it is called deficit spending GDP-gross domestic product-the total value of all goods and services produced domestically by a nation during a year. GNP-gross national product- the total value of all final goods and services produced annually by a nation

1990’s Economy Consumer confidence and spending Driven by the rise of technology and the Internet The “dot.com” industries Low unemployment and low inflation (progressive increase in the general level of prices brought about by an expansion in demand or the money supply) Billions in bonds sold to Chinese, who gradually assumed the role of banker to U.S. Dependence on Chinese cheaply manufactured goods to sustain American consumer-driven economy Kept inflation, interest rates and wage costs low Dow Jones Industrial Average stood at 1000 in late 1980s and soared to 11,000 by 1999.

21st-Century Economy “dot.com” sector collapsed in April 2001 Stock Market began a substantial decline, lasting over a year Housing “bubble” begins collapsing finally creating chaos in late 2007, early 2008. Thousands of homes go into foreclosure after a decade of “shady, risky” lending with no one questioning. Annual income rose 20% for wealthiest 20% of population, rose 8% for next 20%, remained flat for remaining 60% with actual drops in bottom 20%, creating a two-tiered economy.

21st-Century Economy (cont) By 2008, top 1% of population averaged over $1.1 million annually, while bottom 90% only averaged $31 thousand. Outsourcing US jobs becomes prevalent among top US corporations starting in the early 2000s, even as tax dollars bailed them out. The 2000s also saw the coming of the “digital divide” in that low and poor income homes have no computers or digital access skills now almost mandatory for employment

2008 Recession Emergency Economic Stabilization Act 2008 Rescued many large banks and brokerage houses American Recovery and Reinvestment Act 2009 Gave money to state & local governments for projects TARP (troubled asset recovery program) $80 billion to “bail-out” auto industry-Chrysler & GM Auto industry paid back money with interest (2014 last of government involvement) Indiscriminate and risky banking practices

Activity DIRECTIONS: Below is a list of the major categories of federal government spending. Write the percentage YOU THINK should be spent on each in the blanks (should total 100%). Federal Employee and Veterans (former military) Benefits ______ Scientific and Medical Research ______ Medical Benefits (Medicare for the elderly, Medicaid for the poor, CHIP for children) ______ Safety Net Programs (food stamps, free school lunches, etc. for the poor)______ Defense and National Security (includes the military) ______ International Aid (money sent to other countries) ______ Interest Payments on the National Debt ______ Transportation and Infrastructure (highways, bridges, etc.) ______ Social Security Benefits (money paid to retirees, widows, orphans, etc.) Education ______