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Published byEunice Carr Modified over 9 years ago
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Financing Government Uncle Sam takes all your money and what does he do with it?
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2 How does the budget get written!? 1.President/OBM/Executive Depts draft Budget 2.Send proposal to Congress 3.Congress reviews, edits, passes/doesn’t pass …sooo what if Congress doesn’t pass it?
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Where does the government get money? TAXES (Article 1 Section 8) Income—Personal and Corporate Social Insurance (Social Security or Payroll Taxes) Excise—tax on manufacture, sale or consumption of goods and/or performance of services Estate and Gift Custom Duties (Import taxes)
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What is the breakdown of tax revenue (this is how gov gets $$$ to run!)?
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2014 Federal Tax Rates
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Tax Brackets 10% - 35% (USA) Higher is most other developed countries
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Besides taxes, where do we get money? Borrowing—Congress has power to borrow money (Art. 1, Sect. 8) (Kinda like them having student loans…) Public Debt http://www.brillig.com/debt_clock/ http://www.brillig.com/debt_clock/ All money borrowed plus accrued interest How does the gov’t borrow? Issue T-bills (Treasury notes/bills) for short- term borrowing Issue Bonds for long-term borrowing Investors (individuals, banks, foreign countries, etc.) buy the bonds
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Government Spending
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How do we spend the money? What do you think we spend the most money on? If you had to balance the budget, what would you spend money on? http://www.econedlink.org/lessons/e m306/flash/popupActivity.html http://www.econedlink.org/lessons/e m306/flash/popupActivity.html http://deathandtaxesposter.com/ http://deathandtaxesposter.com/
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What are deficits and surpluses? Deficit: When we spend more than we take in Surplus: When we take in more than we spend
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How do we get a deficit? The bulk of the deterioration in the budget since the start of 2001 - some 75 percent of it - has come from policy changes (i.e. tax cuts and spending increases), rather than from economic and technical factors outside policymakers’ control.
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How can we balance the budget? What are you willing to sacrifice?
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