The US Federal Budget
How does our Government spend its money?
Where does all that money go?
Overview- Definitions
•Gross Domestic Product (GDP)
•the monetary value of all the finished goods and services produced within acountry's borders in a specific time period.
•For the Fiscal Year (FY) 2016, the US GDP was 18.472 trillion dollars
•Gross Output (GO)
•an economic concept used to measure total economic activity in theproduction of new goods and services in an accounting period.
•For the FY 2016, the US GO was 32.304 trillion
•Deficit
• The amount by which the government’s total budget exceeds its total receipts for afiscal year.
Overview- Definitions Part 2
•Gross Federal Debt
•The gross amount of debt outstanding issued by the USTreasury.
•Today’s Federal Debt is about $19,338,064,306,000
•BUT, this does not include state and local debt
•AND, it doesn’t include “Agency Debt” (debt issued by federalagencies and government-sponsored enterprises)
•AND, it doesn’t include unfunded liabilities of programs like SocialSecurity and Medicare
•Federal Debt per-person is about $59,265
Government Income
•In FY 2016, the US Government spent 3.951 trillion dollars.
•It earned 3.3 trillion dollars in tax revenue from (in order of income):
•Income Taxes 36.4%
•Social Insurance Taxes 27.3%
•Ad Valorem (property) Taxes 21.3%
•Fees and Charges 7.5%
•Business and Revenue Taxes 7.5%
Where does the money go?
•This 3.951 trillion dollars income was split between ten primaryfederal programs… (in no particular order)
1.Pension Programs (Social Security, Disability/Sickness Pay)
2.Health Care (Medicare, Public Health Services, Hospitals, vendorcosts)
3.Education (Elementary/Secondary/Higher Ed Funding, Training andEmployment services, Libraries, etc.)
4.National Defense (Military Spending, Veterans Benefits, MilitaryAid)
5.Welfare (Food and Nutrition Assistance, income security,Unemployment assistance, Housing programs)
Where does the money go?
•6. Protection (Police services, Fire Departments, Prisons)
•7. Transportation (Ground/Air/Water transportation)
•8. General Government Spending ( Executive and Legislative salaries,Courts, governmental financial support)
•9. Miscellaneous Spending (Government agency spending likeAgriculture, Fuel and Energy, Waste management, Forestry,Environmental Protection, etc.)
•10. Interest (on loans, national debt)
How much does each Federal Programget?
•First, let’s decide: How much do YOU THINK they should get?
•Between the 10 Federal sections that get funding, decide on apercentage of the budget that each section should receive in funding(out of 100% obviously)
•The sections, again, are: Pensions, Health Care, National Defense,Welfare, Protection, Transportation, General Government,Miscellaneous Spending, and Interest costs.
•Really think this through! We will compare your answers to the realbudget amounts.