PANTHERS!
•Get out your Marzano
Folder and Notebook
•Get a textbook …
GOVERNMENT POLICY
and SPENDING
18.3
TAX Review (18.2)
entry task
• Which tax principle and
taxes are associated with
the video?
TAX Review (18.2)
• GOOD JOB !!!!
(DO DA DAB)
• BENEFITS-RECEIVED
PRINCIPLE …
18.2 review
• What kind of taxes are
related/associated in
the video?
18.2 review (cont.)
• State taxes
• Local taxes
• Direct taxes
• Indirect taxes
GOVERNMENT POLICY
and SPENDING
18.3
Marzano Terminology
Balanced Budget
Deficit Budget
Surplus Budget
Entitlement Programs
Main Idea
• Governments (federal, state and local), try
to develop budgets to spend their tax
revenue in a way that will benefit the
economy.
Word origin
• Take note as you read that,
• Polis = city (e.g. metropolis, Minneapolis, …)
• Polites = citizens
• Politics = ????
Poly + ticks
Many Parasites
www.usgovernmentrevenue.com
•
Total Direct Revenue
•
Income Taxes
•
Social Insurance Taxes
•
Ad valorem Taxes
$1.4 trillion
•
Fees and Charges
$0.5 trillion
•
Business &Misc. Revenue $0.5 trillion
$6.8 trillion
$2.3 trillion
$1.8 trillion
Tax Revenue
New Mexico …
• $21.5 Billion = state & local revenue
• $97.2 Billion Gross State Product
• 1.7% = State economic growth
• 2.1 million = population
Spending-Policy Goals
• Pizza – eat all or share?
• Private decision / What you do = who you are
and your personal goals
• Private sector decisions
Spending-Policy Goals (cont.)
Public sector decisions
• Government made
• Reflect on public goals
• that reflects on us as a society
• Agreed upon when we elect officials
Spending-Policy Goals (cont.)
Copy Economic Stability (498)
Federal Gov’t works to keep the economy
strong with economic stabilization policies that:
1. Promote economic growth
2. Maintain stable prices
3. Ensure full employment
Conclude - 498
•Which is most
important?
Citizen Profile (page 498)
• RSS
• Retell the profile about Alice M. Rivlin.
• Answer, “ Citizenship”
Reading Check page 498
• Copy the graphic organizer on Economic
Stability
• Q. What are the three main goals of the
economic stabilization policy?
• Which “ Act” is this based on?
Types of Government Budgets
• Balanced Budget – where the gov’t spends
only what it takes in.
States that spend only their generated revenues,
operate on balanced budgets.
Types of Government Budgets (cont.)
• Most state and local
• Spending must be limited and controlled
• DO not borrow, but cut budgets when the
economy weakens.
Types of Government Budgets (cont.)
• Deficit Budgets – they spend more than they
take in .
• Borrow more by selling bonds to banks and
individuals
• Fed is a reliable borrower
Types of Government Budgets (cont.)
SURPLUS BUDGETS:
• When the gov’t spends less than it takes in
• Beneficial during inflation
Budget Policy
• Chap. 16 – Recall “business cycle?”
• Feds use “BUDGET POLICY” to prevent
major up and downs
• UP – Surplus policy and cut spending
• DOWN - Deficit Policy, spend more, sell
bonds and stimulate the GDP
Reading Check?
• How can the government
control the GDP?
Reading Check , page 499…
• If prices go up, the gov’t can create a surplus
budget, which will bring prices down and slow
the GDP. If prices go down, the gov’t can
operate on a deficit budget, which will
stimulate the GDP and bring prices up again.
A Reading Czech …
Reading Czech!
To je, jak
to děláme!
National Priorities
Federal Gov’t has two options
1. Increase or Decrease taxes
2. Increase or Decrease Gov’t expenditures
Too much or too little of one or the other will
have long term affects
Federal Gov’t Spending
• Council of Economic Advisors (CEA) advise
the POTUS
• CEA & POTUS submit report to Congress
called the “Economic Report of the President”
• CEA also makes stabilization
recommendations
Federal Gov’t Spending Patterns
Two categories
1. Direct Purchases of goods & services
1. Transfer Payments, where no goods or
services are produced
Federal Gov’t Spending Patterns (cont.)
Page 500
• Gov’t Spending
• Photo
• Evaluate Information
Sample answer …
• The gov’t shows its preferences and values by
its spending priorities. Liberal gov’ts spend on
social programs. Conservative spending is on
defense, tax cuts and spending cuts.
Entitlement Programs
Provide benefits to people who are
‘entitled’ to them by law!
• Social Security (20%) of the federal budget
• Medicare/Medicaid
• Unemployment, federal retirement …
• FUTURE PROBLEMS WITH TRANSEFER PAYMENTS?
THE NATIONAL DEBT
• TOTAL AMOUNT THE FEDERAL GOV’T
OWES LENDERS (holders of bonds)
• $9 trillion 2007
• Interest must be paid ($314 Billion 2005)
• Reduces amount for other programs
THE NATIONAL DEBT
• THE DEBT CLOCK
Real Life Citizenship page 502
• Read, “How would you Spend public money?”
• Focus with a neighbor
• RSS, “What do you think?
State & Local Gov’t Spending
• Most mandated by state law for a balance
budget.
• New Mexico?
• Recession = CUTS & problems
State & Local Gov’t Spending (cont.)
• Most are “Direct Expenditures ”
• Towards day-to-day expenses (schools, HI
ways, streets, hospitals, parks, etc.)
• Reduced tax revenues = TURMOIL!!
State & Local Gov’t Spending (cont.)
• Historically - Taxation & spending by the
federal is independent from state & local
• CHANGED in the last 50 years –
1. States turn to feds for help
2. Local have turned to state
Revenue and Spending
Patterns
Different taxes (revenue)
• Sales & property= 1/3
• Auto fees & licenses
• Personal Property taxes
• Gasoline
• Recreational fees
Revenue and Spending Patterns (cont.)
Spending
• Education – more than 1/3 of state & local $$$
• Universities & Public Schools
• Highway maintenance
• Welfare assistance
• Police & Fire, water, sewage, trash collection, local
library, hospital and judicial systems.