1. Primary goal of the government:
Stable growth
Unemployment
Low inflation

2. The Budget
Goal: to balance what the govt. takes in with what it spends.
Budget surplus- takes in more than it spends
Budget deficit- spends more than it take in

4. National Debt- the total amount of outstanding debt for the federal government.
1998 the government began to run a budget surplus
10 year budget surplus was projected but it didn’t happen
Sept. 11 terrorist attacks happened
Our national debt is over 18 trillion right now.

5. Taxation Taxes are justified based on 2 basic principles
benefits-received principle- those who use the service pay the taxes
Example- tax on gas or alcohol
ability-to-pay principle- those with higher income pay more taxes
Example- property taxes

6. Forms of Taxation Proportional Tax- a portion of your income
Example- Everyone pays 10%
Progressive Tax- the higher the income the more tax you pay
Example- federal income tax
Regressive Tax- % you pay goes down the more money you make
Example- sales tax on food