1. 14.2 Federal, State, and Local Budgets
CONTEMPORARY ECONOMICS
11/29/2018
14.2 Federal, State, and Local Budgets
Objectives
Identify the top spending category in the federal budget and the top source of revenue.
Identify the top spending category in state budgets and the top source of revenue.
Identify the top spending category in local budgets and the top source of income.
Compare the size of government here and abroad.
LESSON 14.2

2. 14.2 Federal, State, and Local Budgets
Key Terms
government budget
payroll taxes

3. 14.2 Federal, State, and Local Budgets
Federal Budgets
A government budget is a plan for outlays and revenue for a specified period.

4. Federal Spending Redistribution Defense Interest payments
14.2 Federal, State, and Local Budgets
Federal Spending
Redistribution
Defense
Interest payments
Other outlays

5. Composition of Federal Spending Since 1960
14.2 Federal, State, and Local Budgets
Composition of Federal Spending Since 1960
Figure 14.3

6. 14.2 Federal, State, and Local Budgets
Federal Revenue
Sixteenth Amendment to the U.S. Constitution empowered Congress to levy a tax on personal income.
Federal Insurance Contributions Act (FICA)
Payroll taxes are taxes deducted from paychecks to support Social Security and Medicare

7. Composition of Federal Revenue Since 1960
14.2 Federal, State, and Local Budgets
Composition of Federal Revenue Since 1960
Figure 14.4

8. State Budgets State spending State revenue
14.2 Federal, State, and Local Budgets
State Budgets
State spending
State revenue

9. Composition of State Spending and State Revenue
14.2 Federal, State, and Local Budgets
Composition of State Spending and State Revenue
Figure 14.5

10. Local Budgets Local spending Local revenue
14.2 Federal, State, and Local Budgets
Local Budgets
Local spending
Local revenue

11. Composition of Local Spending and Local Revenue
14.2 Federal, State, and Local Budgets
Composition of Local Spending and Local Revenue
Figure 14.6

12. Relative Size and Growth of Government
14.2 Federal, State, and Local Budgets
Relative Size and Growth of Government
How has the size of government in America changed in recent years?
How does that size compare with what’s been going on in other major economies around the world?

13. Government Outlays as Percentage of GDP
14.2 Federal, State, and Local Budgets
Government Outlays as Percentage of GDP
Figure 14.7