1. Do Now: What is a budget?

2.  Budget  President  Congress  Revenues (taxes)  Expenditures (spending/appropriations)  Categories of spending (Big 3)

3.  Budget deficit  Define  Budget Surplus?

4.  National Debt  Define –  18 trillion dollars

5.  Interest Payments on the Debt  part of the budget  Grows as the debt grows  7% of budget due to low interest rates

6.  Effects of National Debt  Crowding out (?)  Increase total demand ofr goods/services (inflation)  Interest payments on debt  Foreign owned portion

7. 1. Define Budget. 2. What is our federal government’s major source of revenue? 3. What is meant by expenditure? 4. What are the 3 biggest categories of federal spending?

8.  When government expenditures exceed revenue a ________ has occurred.  When government revenues exceed expenditures a _________has occurred.  The accumulated borrowing the federal government engages to finance its budget deficits is the ________________.

9.  What is the current level of the U.S. national debt?  What are some negative effects of a large national debt?

10.  Do Now:  What is a budget deficit?  What is the national debt?

11.  Cut Spending?  Which areas?  Negative effects?  Politicians?

12.  Raise Taxes  For whom?  How much?  Negative effects

13.  Balanced Budget Amendment  Define  difficulties?  Good for the economy?

14.  Demand-Side Theory  Keynesian Economics  Deficit spending to stimulate the economy during a recession/contraction  Democrats favor this theory

15.  Supply-Side theory  Across the board tax cuts  Individuals and corporations  “trickle down” economics  Stimulate the economy  Reaganomics  Favored by Republicans

16.  Other concerns  Can we afford our debt?  Debt as a percentage of GDP  Foreign owned portion of the debt

17.  Does the problem of budget deficits and national debt need to be solved for? Explain.