1. Context – Domestic Policy & Social Security
2006 Q2 – In recent decades, entitlement programs have constituted a substantial portion of the United States budget. Social Security is the largest entitlement program. Entitlement Program – Government programs that provide mandated/guaranteed benefits to those eligible.

2. Warm-Up Discussion https://www.youtube.com/watch?v=k1hCklDziYA
Do you know anyone who gets Social Security checks?
Do you think Social Security is a scam? Do you think its fair for the gov’t to take your money only to pay you back when you’re older?
Do you think you would do a better job of saving for your own retirement?
If you retired in 2017, your check would ~1300 per month. (Avg. rent in LA for one-bedroom is ~1,440 per month)
Pre-Warm Up Questions – Does anyone work? Do you get Social Security taken out? Does anyone know what Social Security is?
Donald Trump on Social Security

3. Social Security - A government system that provides monetary assistance to retired/disable people. (65 years old)

4. Social Security paid through Income Tax/Payroll Tax (6
Social Security paid through Income Tax/Payroll Tax (6.7%) Young/Working/Able Adults pay for the Elderly

5. Age Breakdown in United States (2010 Census)
Percentage
65 years and old
14.5%
18-64 Years Old
62.5%
Under 18
24%

6. The Baby Boomer Generation occurred post-WWII (1945) after troops returned home. This increase in births is called the Baby Boomer Generation. This is related to Social Security because as the baby boomers become older and are Senior Citizens (65+) there needs to be more money to be paid out to these people.

7. US Population Projections
<18 Years Old
Adults (18-65)
65+
2030
2060
2017

8. Trends in Social Security
Gov’t must pay more people in the future. (Will there be enough money?)
1. There will be more older people (65+) in the future. BABY BOOMERS are getting old!
2. People are living longer. Life expectancy is 78 years old! (2015)
Gov’t must pay more people and for a longer period of time! (Will there be enough money)
3. With fewer workers in the future, less money is being paid in, and more money is being paid out

9. What can the gov’t do to fix Social Security?
Raise the retirement age to 67, 70?!!
Increase the Social Security Tax
People will have to pay into the program longer.
More money will be paid into Social Security
In addition to paying Social Security, you need to SAVE and INVEST your money so that you have enough money to retire!

10. Warm-Up 10-3
Should the rich pay a higher percentage of taxes (since they have more money) or should everyone pay the same rate? Explain why or why not?
For example buying soda. Should a rich person pay a higher tax on soda than a poor person? Should a poor person pay less income tax just because they make less?

11. CONTEMPORARY ECONOMICS
What is a tax?
9/3/2018
Taxes provide the necessary funds for our country to operate, and is the primary way our government collects money. Without this money, the government would not be able to provide the goods and services we have grown to expect.
A tax is a required payment to the government to pay for defense, education, police and fire protection, and highways.
A tax is a payment to the government to pay for public goods. For example: Cigarette taxes pay for Children Education
LESSON 2.1

12. CONTEMPORARY ECONOMICS
What is taxed?
9/3/2018
Income/ Payroll
Propert y
Excise
Estate
Sales
Income - tax on your how much money you make.
_________– Tax on the value of your property
___________– Tax on consumer purchases.
_______________– tax on the manufacture or sale of selected goods such as liquor and gasoline.
_____________ Tax on inheritance of property.
LESSON 2.1

13. CONTEMPORARY ECONOMICS
Tax Structures
9/3/2018
Proportional Tax – Everyone is taxed the percentage rate, regardless of income. Also known as flat tax.
a. Example: Sales Tax
Progressive Tax – The MORE income you have the higher the tax rate
a. Example: Estate Taxes (houses)
Regressive Tax – The MORE income you make the LESS you pay the tax rate.
a. Social Security Tax (Rich people pay less since they already have money)
LESSON 2.1

15. Where does most of the government get its taxes from
Where does most of the government get its taxes from? (Which two top categories?) -
Do you think it is fair that the government gets their money from these two areas?

16. CONTEMPORARY ECONOMICS
9/3/2018
Housing and Community
National Parks
Food and Agriculture
Education
Energy and Environment
Science & Technology
Transportation
Foreign Aid
Prisons
Food Stamps
Interest on Debt
Federal Courts
Military/ Defense/ Veterans
Social Security
Medicaid/ Medicare
1. Without looking at the next slide! What are the top 5 areas you think government spends their money?
LESSON 2.1

17. What are the top 3 areas government spends its money on?
The Top two areas are called what kind of programs…..? Entitlements
Do you think we are spending too much on the top 3 areas and not in other places?

18. Mandatory Spending AKA Entitlement Programs
Mandatory Spending AKA Entitlement Programs. Congress is REQUIRED TO SPEND THIS MONEY. IT IS automatically approved.
Spending that must be approved by Congress each year. More flexible!

19. Medicare – Government Assisted Healthcare for the Elderly.
Medicaid – Government Assisted Healthcare for low-income individuals.

20. Increase in Mandatory Spending. Decrease in Discretionary Spending
Increase in Mandatory Spending. Decrease in Discretionary Spending. (Increase in Interest Payments)
• Aging population increases spending on entitlement programs.
• Rising poverty rates increase spending on entitlement programs.

22. In 2017, the United States spent 20 BILLION DOLLARS MORE THAN WHAT IT HAD! When the Fed Gov’t spends more money than what it has that is called a Deficit.

23. What do you notice h

24. DEBT = The Total Amount of Deficit added together.
FOR EXAMPLE: 1. In 2016 – You Spent $100 more than what you had. You have a $100 Deficit! 2. In 2017 – You Spent $200 more than what you had. You have a $200 Deficit for 2017, but $300 total DEBT!

25. Balance the Budget = The government should spend only what it has
Balance the Budget = The government should spend only what it has. SPENDING=EARNINGS!
Do you believe the government should create an Amendment making it mandatory to balance the budget?
What would be a Democratic (liberal) solution to the problem?
What would be a Republican (conservative) solution to the problem?

26. Voters opposed eliminating popular social programs (Social Security, Medicare, Medicaid)
Reagan’s coalition strongly believed in smaller government, but Reagan made the government bigger. The Federal Budgets drastically increased (meaning the fed. Government is spending more money, almost every year after WWII. The Federal Deficit, meaning the government is spending more money than what they have continues to grow. This is because Reagan continues to cut taxes, increase defense spending, and MOST importantly, the 2 programs that eat up most of budget such as Social Security and Medicare/Medicaid are extremely popular. So even though those voters may have wanted smalled federal government they opposed eliminating many of the social programs.
The Federal Budget continues to increase because
Tax Cuts under Reagan
Increased Defense Spending
Large increase in Spending on big programs like social security and medicare and mediacaid. (Social safety Net)

27.
3rd Presidential Debate – Trump, Clinton, on National Debt

28. SO…How do we fix this..? Raise taxes (more funding!) BUT……
Decrease Spending (less spending) BUT…………
Borrow less money. If you borrow money you must pay interest on it. So borrowing money means the US must payback people even more!

29. Current Events
mp-budget- proposal.html?mcubz=3&mtrref= w.nytimes.com&gwh=CB D261C E &gwt=pay