1. Ch. 10- Government Spending

2. 2012 total expenditures by federal, state, and local governments amounted to a little over $6 trillion
Per capita (per person)- almost $19,408 for every man, woman, and child in the U.S.

3. What services should the government provide and what services should the private sector provide?
Public Sector
Part of the economy made up of federal, state, and local governments
Private Sector
Part of the economy made up of private individuals and privately-owned businesses

4. Two Kinds of Spending Goods and Services Transfer Payments
Tanks, planes, ships, office buildings, land for parks, etc.
Hire people to work in agencies/staff military
Spend money to provide the public goods and services that most of us enjoy on a daily basis
Transfer Payments
Payment for which the government receives neither goods nor services in return
Social Security, welfare, unemployment, aid for people with disabilities

5. Impact of Government Spending
Affecting Resource Allocation
Resources go where government spends money
Redistributing Income
Way in which income is spread out among families and individuals
Competing with the Private Sector
Public colleges vs. private
Health care

6. Federal Government Spending
Federal Budget
Annual plan by the President outlining proposed spending for the coming year
Prepared for a fiscal year
Fiscal year- 12 month financial planning period
October 1 through September 30

8. Where Does The Money Go?
Federal Budget
What's a Trillion Dollars?

9. State and Local Spending
State Governments
Public welfare, higher education, highway construction and road improvement
Local Governments
Elementary/secondary education, utilities, hospitals, police protection, interest on debt, public welfare, and highways
Other- corrections, health, fire protection, parks and recreation, housing and community development

10. Deficits and the National Debt
Deficit Spending
Spending in excess of revenues collected
SPENDING MONEY YOU DON’T HAVE
Must borrow money from others which creates and adds to our country's debt
How big is our National Debt??
U.S. National Debt Clock