1. Copyright © 2008 Pearson Education, Inc. Slide 4-1 Unit 4F Understanding the Federal Budget

2. Copyright © 2008 Pearson Education, Inc. Slide 4-2 Federal Government Receipts and Outlays 4-F ReceiptsOutlays

3. Federal Government Outlays Two categories Mandatory Outlays: expenses that will be paid automatically unless Congress takes action. Often referred to as “entitlements.” Also includes interest on the federal debt. Discretionary Outlays: decided on a year-to- year basis. These must be approved by Congress and signed into law by the President (bills). These are subdivided into defense and non-defense. Copyright © 2008 Pearson Education, Inc. Slide 4-3

4. Copyright © 2008 Pearson Education, Inc. Slide 4-4 Federal Budget Summary 4-F Link to current: http://www.whitehouse.gov/omb/budget/Overview

5. Deficit vs. Debt Deficit refers to money that is borrowed (or taken from savings) during a single year. Debt refers to the total amount of money owed to lenders, which may result from accumulating deficits over many years. Copyright © 2008 Pearson Education, Inc. Slide 4-5

6. Copyright © 2008 Pearson Education, Inc. Slide 4-6 Federal Surplus / Deficit and Overall Debt Since 1955 4-F

7. http://www.brillig.com/debt_clo ck/ U.S. NATIONAL DEBT CLOCK The Outstanding Public Debt as of 12 Oct 2010 at 02:31:14 AM GMT is: $13,633,141,046,135.65 The estimated population of the United States is 309,276,944 so each citizen's share of this debt is $44,080.69. Copyright © 2008 Pearson Education, Inc. Slide 4-7

8. Two Kinds of National Debt Publicly held debt (net debt or marketable debt) represents money the government must repay to individuals and institutions that bought Treasury issues (bills, notes, and bonds). Gross debt includes both the publicly held debt and money that the government owes to its own trust funds, such as the Social Security trust fund. Copyright © 2008 Pearson Education, Inc. Slide 4-8

9. Who Holds the Most of “Our” National Debt? http://www.ustreas.gov/tic/mfh.txt What are the ramifications? Copyright © 2008 Pearson Education, Inc. Slide 4-9