1. Government Spending

2. Budgeting Activity
You are the Government, and in charge of our budget and spending.
Choose 5 items you think should have a budget increase, and 5 items that should be decreased.
Explain why.
101/spending/

3. In what ways does federal government spending affect you?

4. Brainstorm a list of goods and services provided by these different levels of government:
Federal
State
Local

5. Government Spending in Perspective
Spends its revenues on goods, services, and transfer payments.
Spending by the private sector was relatively low, prior to the Great Depression
Spending has increased sharply since
Why do you think that some people object to the government providing certain goods and services?

6. Two Types of Spending Goods and services
The government needs to buy goods.
Ex: Tanks, planes, office buildings, supplies for schools, etc.
Purchase supplies and pay for utilities
Hire people to work in agencies and staff in the military
Payments include the wages and salaries for these workers

7. 2. Transfer Payment Payments can be made to individuals Include:
Social Security, unemployment, welfare, disability aids
Grant-in-aid: a transfer payment that one level of government make to another
Ex: Interstate highway construction programs
Grants money to cover major part of the cost, states where the highways will be built pay the rest

8. Impact of government spending
Government spending has a direct impact on our economy
Decisions directly affect how resources are distributed
Ex: spending revenues on missile systems instead of welfare programs
This stimulates economic activity
How would this apply to No Child Left Behind?

9. Redistributing Income
Government spending influences the way in which income is to be paid among families, individuals, or other groups
Ex: transfer payments to needy families
Ex: Rebuilding Iraq and Afghanistan increases incomes of national defense industries but not those who work in inner cities

10. Competing with the Private Sector
When the government produces goods and services, it competes with the private sector
Private Sector –part of the economy made up of private individuals and businesses
corporations (both profit and non-profit), partnerships, and charities.
Public Sector – part of the economy made up of the local, state, and federal governments.
federal, provincial, state, or municipal governments.

11. Increasing the Tax Burden
The increased tax burden that is needed to support expenses has attracted enormous attention in recent years.
People want to reduce their taxes, but don’t want to give up benefits the government provides

12. Discretionary Spending - portion of the budget that the president requests and Congress adopts every year.
Ex: Congress directly sets the level of spending and can choose to increase or decrease spending on any of those programs in a given year.
Mandatory Spending - made up of earned-benefit or entitlement programs, and the spending for those programs is determined by eligibility rules
Ex: Congress creates a program like the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.
Sets criteria determining who is eligible to receive benefits from the program.
Amount of money spent on SNAP each year is determined by how many people are eligible and apply for benefits.

14. $1.16 trillion in discretionary spending for 2015.

15. $2.56 trillion in mandatory spending for 2015