1. Brief Response What are the arguments for and against tax credits and deductions? (4) Pro (for): – They let the wealthy and businesses keep more of their income to reinvest in their business and spend in the larger economy. Con (against): – They take revenue for the government, reducing services and increasing the deficit.

2. Chapter 10 Government Spending Section 1 p. 255 Terms: Per capita 255 per person Every man, woman, and child

3. Public sector 255 the part of the economy made up of federal, state, local governments Began participating in the economy in the 1930s-1940s.

4. Private sector 256 the part of the economy made up of non- governmental (private) individuals and businesses.

5. Public Sector or Private Sector? Verdugo Hills High School Von’s Grocery Ritter Law Group Sunland-Tujunga Branch Library Sunland Transmissions USC Verdugo Hills Hospital World Gym Bank of America Public Private Public Private Public Private

6. Effects of the 2008 Recession on both job sectors

7. Transfer payment 257 revenue distribution where the government gets neither goods nor services in return…..

8. Grant-in-aid Transfer payment one level of government makes to another. – Interstate highways – Public schools

9. Distribution of income 258 the way in which income is allocated among groups – Families – Individuals – Cities – Regions – nations

10. CH 10, Section 2, p. 260 Terms: Federal budget 260 annual national plan Outlines – Expected revenues – Expected expenditures for the coming year.

11. Mandatory spending 260 government spending required by on-going law No need for annual approval of Congress. – Social Security/Medicare – Interest payments on borrowed money

12. Discretionary spending 260 spending programs that must receive annual authorization from Congress. – Military/Coast Guard – Welfare changes COLA – Cost of Living Allowance (adjusts for inflation)

13. Fiscal year 260 A twelve-month financial planning period. – US October 1 to September 30. – CA July 1 to June 30.

14. US Budget, 2014 Do on your “other sheet” (don’t use titles in your answer) What is the difference in the two charts? – First chart shows….. – Second chart shows….. – Which budget plan is the more political (many fights in the last two congresses) of the two?

15. 2014 What is the difference in the two charts? – First chart shows….. The entire budget (mandatory AND discretionary) – Second chart shows….. Spending that can be changed that year w/o changing a law only (discretionary) – Which budget plan is the more political (many fights in the last two congresses) of the two? Explain. Discretionary spending because it can be changed annually (it is not mandated spending which would require changing gan entire law.)

16. Federal budget deficit 251 more national expenditures than revenues

17. Federal budget surplus 251 more national revenues than expenditures

18. Appropriations bill 261 an act of Congress that allows federal agencies to spend money for a specific purpose. Process involves – Congressional hearings (fact finding) – Debate of the measure – Committee vote – Congressional votes Current appropriations docket of the House of Representativesdocket

19. Medicaid 5/7 265 joint Federal-state medical insurance program For low-income persons

20. Hwk Assessments, Class Work, to Know

21. 1 Because the government was called upon to regulate – Banks – Public utilities – many other activities CH 10, sect 1, Assessments: Checking for Understanding CH 10, S1

22. CH 10, S1 Assessment 3 It grew dramatically during WWII and then fell back after the war. Since that time it has grown significantly.

23. CH 10, S1 Assessment 4 Purchase of goods and services Transfer payments to support incomes of disadvantaged persons.

24. CH 10, S1 Assessment 5 It can – affect the allocation of resources – Affect the distribution of income – cause the government to compete with producers in the private sector

25. Assessments: Checking for Understanding CH 10, S2 1 Mandatory spending is authorized by law – Continues without the need for annual approvals by Congress.

26. CH 10, S2 Assessment 3 Executive formulation – President and his Cabinet/advisors prepare the budget – Executive submits budget proposal to Congress Congressional Action – Reviews – Modifies – Approves budget Final approval – In which the president signs or vetoes the budget.

27. CH 10, S2 Assessment 4 Social Security National defense Income security Medicare Net interest on the Federal Debt

28. Image, p. 256 Question: Yes, following WWII.

29. Question From revenues Image, p. 257

30. Image, p. 262 Question Individual income tax

31. Image, p. 263 Question Spending for Social Security changed very little between 1980 and 2004 – It went from 20.6 percent in 1980 to 19.8 percent in 1990, to 22.3 percent in 2004.

32. Image, p. 264 Questions 1. the United States and Japan 2. Yes. Spending percentage remained at 30.35 percent throughout the period. – Showed less variance than most of the other nations’ spending.

33. Question 1.4 percent Image, p. 265

34. Brief Response Why is government spending so important to a thriving economy? (3) Government spending….