1. Chapter 11 – Government in the Economy
Lesson 1 – Government in the Economy
Lesson 2 – Government Budgets

2. TAXES! You go on a game show and can win either $1500 or a 13,000 car.
Which do you chose?
Why?
Hero or Moron?
After watching the clip, is Kevin a hero or moron? Why?

3. Lesson 1 Key Terms Beneficial externality Cost-benefit analysis
Deregulate
Economic stability
Harmful externality
Public goods and services

4. Lesson 1 Objectives Define the economic roles of government
Give at least 4 reasons for the growth of the government sectors since the 1930s
Compare the growth of different levels of government

5. Lesson 1 Major Concepts
Government has many economic roles to play in society
Since the 1930s, government participation in the economy has grown dramatically
Reasons for the increasing size and cost of the government include the burdens of national defense, demands of a growing population, economic growth, inflation, and changing attitudes toward government

6. Brainstorm How is government involved in your life?
Think-Pair-Share 3 ways government is involved in your life
Class Discussion – pg. 374

7. Where Your Income Tax Goes

9. Paying for War

10. Federal Spending Mandatory Spending – Medicare, Social Security
Discretionary Spending – govt can make choices
Over the years mandatory % has gone up, discretionary % has gone down

11. Entitlement Programs Social Security Medicare Medicaid
50 million people
Medicare
42 million people
Most 65 years and over
Medicaid
Low-income families
Disabled people
Elderly in nursing homes

12. Discretionary Spending
Defense Spending
20% of budget

13. “Everything Else” Spending
Education
Training
Scientific research
Student loans
Technology
National parks and monuments
Law enforcement
Environmental cleanup
Housing
Land management
Disaster aid
Foreign aid
Farm subsidies

14. Federal Aid to State and Local Governments
$406 billion a year
50 states
$1400 a person

15. Our Growing Local, State, and Federal Government
With a partner discuss figure 14.6 – pg. 371
Analyze the categories of expenditures in the federal budget
Answer – Which categories receive the most federal funds?

16. Our Growing Local, State, and Federal Government
Figure 14.7 – pg. 376
Analyze the categories of expenditures in a state budget
Answer – What are the major categories of state government spending?

17. Our Growing Local, State, and Federal Government
Figure 14.8 – pg. 379
Analyze the categories of expenditures in a state budget
Answer – What are the major categories of local government spending? How do they differ from the major categories of state government spending shown on pg. 376

18. State Budgets
Unlike DC, 49 state governments require a balanced budget

19. Where State Monies Go Education Elementary, middle schools
High schools
State Universities
JC’s
Tech schools

20. Where State Monies Go Public Safety Highways and Transportation
Police
Correctional facilities
Highways and Transportation
Public welfare

21. Limits on State Taxation
Can’t tax imports/exports
Tax Exempt
Nonprofit
Religious groups
charities

22. Property Taxes
Tax Assessor – an official who determines the value of a property
Main source of funding for public schools

23. The Jobs of Local Government
Public school system
Law enforcement
Fire protection
Libraries, airports, hospitals
Parks
Public health
Public transportation
Elections
Record keeping
Social services

24. Lesson Wrap-up Chapter 14 Section 3 and 4 Review Page 374 1-4

25. Lesson 2 – Government Budgets

26. Lesson 2 Objectives Explain the purposes of budgets
Complete a chart comparing items of state and local expenditures with items of federal expenditures
Suggest alternative means for balancing s given budget
Explain why Congress and the president have frequently found it difficult to balance the budget
Identify recipients of different social insurance programs and explain why such programs have become more expensive

27. Lesson 2 Vocab Balanced Block grant Budget Correctional Deficit
Fiscal year
Grant-in-aid
Income security
Medicaid
Medicare
Outlays
Outpatient
Receipts
Surplus
Unemployment compensation
Unfunded mandate

28. Lesson 2 Major Concepts
Each government (local, state, federal) plans its economic year (fiscal year) through a budget
A budget itemizes sources of revenue, R, and expenditures E. If R equals E the budget is balanced. If R is greater than E, there is a budget surplus. If R is less than E, there is a budget deficit
Balancing a government budget can involve difficult choices. Revenues may be increased by raising taxes, or expenditures may be reduced by cutting designated programs.
In recent years, various factors have pushed government social insurance programs to the brink of bankruptcy.