warmup how do you keep track of where you spend your money?
TRANSCRIPT
Warmup
How do you keep track of where you spend your money?
EXPLORING THE MONEY MATTERS OF THE
FEDERAL GOVERNMENT
Money Matters$ $$
Where Does Federal Money Come From?
$
Where Does Federal Money Come From?
$When the government needs more money,
it can’t simply start printing it.
It has to come from somewhere!
Where Does Federal Money Come From?
$
TAXES!
You might have heard people complain about paying taxes from time to time, but
without taxes our government couldn’t run some very important programs that help
people!
Where Federal Money Comes From$
The money that the government runs on is raised through taxes.
This money is called
REVENUE!
That’s right! The money raised by the
government through taxes is called revenue!
There are several types of taxes…
$Where Federal Money Comes From
Income
Tax
Social Security
Corporate Income Tax
Excise Tax
Other Taxes
This tax is
based on a
percentage of what
you make. The more
you make, the higher
percentage you pay!
This tax is taken to provide retired people
with income they need. In 2010 it was 6.2% of your
total income!
Just like the personal income tax,
corporations must pay income taxes!
These are taxes paid
on certain goods like
alcohol, cigarettes,
jewelry, and gas. This includes estate taxes (when
someone dies) and taxes on goods brought from other countries (tariffs).
Where Federal Money Comes From$
TOTAL: $2,381,000,000,000
Quick Review! $
Revenue is…
A. New “reve”
B. Money that the government raises through taxes
C. Money that the government spends on taxes
D. Money that the government spends over their budget
Where Federal Money Goes
The Federal Budget
With all that money (all $2,381,000,000,000 of it) and all the projects in the country to think about, there is only
one thing that can help keep it all straight…
$
Where Federal Money Goes$
What’s a BUDGET?
Where Federal Money Goes$
FoodHousingClothesOther NeedsInsuranceCar
BUDGET: A plan for how money is earned and spent
Where Federal Money Goes$
DefenseSocial SecurityMedicare & Med-icaidOther MandatoryOther Dis-cretionaryInterest
FEDERAL BUDGET: A plan for how the government brings in and spends revenue
Where Federal Money Goes$
A budget is…
A. a type of plan for printing money.
B. something the government uses to measure things.
C. a plan for receiving and spending money.
D. a pet bird.
I see! A budget is a plan for receiving and
spending money.
Federal Spending
There are several ways the federal government
spends money…
$
Federal Spending$
National Defense
Social Security
Income Security
Medicare
Health
Net Interest
Veterans Benefits
Education & Employment
Transportation
International Affairs
Administration of Justice
Resources & Environment
Science & Technology
Government
Agriculture
Community & Regional Development
Energy
These are just broad categories!! Let’s
break them down…
FY 2010: National Defense$
Defending our nation is a high priority.
In 2010, more than $650 billion dollars went to
funding military operations, personnel,
supplies, and research!
Total Defense Spending:
$722,000,000,000
FY 2010: Social Security$
When people are retired or disabled, Social
Security helps them get the financial assistance
they need.
Total Social Security Spending:
$724,000,000,000
FY 2010: Income Security$
Other types of financial assistance help people
who are disabled, unemployed, or needy.
These programs provide necessities like housing
and food.
Total Income Security Spending:
$629,000,000,000
FY 2010: Medicare$
When people retire, they often lose their health
insurance.
The U.S. government has established Medicare to help them pay for health
care! Total Medicare Spending:
$462,000,000,000
FY 2010: Health$
Doctors’ visits, medicines, emergency care… these
are necessities for everyone!
Insurance for the needy, disease research and
control, and children’s health insurance all fall
into this category.
Total Health Spending:
$386,000,000,000
FY 2010: Other Spending$
There are many other categories of government spending. These include:
• Education• Science
• Environment• Development• Transportation
Other Government Spending:
$677,000,000,000
FY 2010 Spending$
The total estimated budget for 2010 was
$3,600,000,000,000
Hundred
sThousand
sMillions
Billions
Trillions!
Quick Review! $
The federal budget is…
A. The plan for managing and spending state money.
B. The plan for raising government funds.
C. The plan for figuring out who will feed the dog.
D. The plan for managing and spending federal money.
$Two Possible Outcomes
After all the revenue is counted and all the spending is tallied,
there are two possible outcomes for the
budget…
$
Deficit Surplus
OR
Two Possible Outcomes
The government spends LESS
than it raises in taxes so that
there is money left over!
The government spends MORE
than it raises in taxes so that it must borrow
money!
$Two Possible Outcomes
Deficit In a deficit there is no money left over after the budget is laid out.
In fact the government must borrow money to complete the
budget!
Trillions of Dollars
SurplusIn a surplus there is money left
over after the budget is laid out.
$Two Possible Outcomes
The government can use the money that is left over for other
projects!
Trillions of Dollars
1980 1985 1990 1995 2000 2005-300
-100
100
300
500
Revenue Short of Budget in Bil-lions
$This chart shows that there has been a deficit almost every year since 1980.
Two Possible Outcomes
Deficit: more money spent than earned
Surplus: less money spent than earned
$Fill in the blank:
Most of the revenue raised by the government
comes from _________tax.
income
$
Match the definition to the term:
budget
federal budgetsurplus
deficit
money left over after the budget is spent
spending more than is raised in taxes
a plan for how money is earned and spent
the plan for bringing in and spending revenue
$
budget
federal budgetsurplus
deficit
money left over after the budget is spent
spending more than is raised in taxes
Match the definition to the term:
a plan for how money is earned and spent
the plan for bringing in and spending revenue
$
Match the definition to the term:
budget
federal budgetsurplus
deficit
money left over after the budget is spent
spending more than is raised in taxes
a plan for how money is earned and spent
the plan for bringing in and spending revenue
$
Match the definition to the term:
budget
federal budgetsurplus
deficit
money left over after the budget is spent
spending more than is raised in taxes
a plan for how money is earned and spent
the plan for bringing in and spending revenue
$REVIEW
budget
federal budgetsurplus
deficit
money left over after the budget is spent
spending more than is raised in taxes
Way to
go!
a plan for how money is earned and spent
the plan for bringing in and spending revenue
$
When the country spends more than it earns that is called
a…
A)
Surplus OR
B) Deficit
Choose the right answer:
When the country spends less than the amount of money it earns it is called a…
A)
Surplus OR
B) Deficit
$Choose the right answer:
According to the chart shown earlier, our country usually
has a…
A)
Surplus OR
B) Deficit
$Choose the right answer:
That’s right!Our country usually spends more than it earns, so we have a
deficit!
$REVIEW