Download Money Matters

Money Matters
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EXPLORING THE MONEY
MATTERS OF THE FEDERAL
GOVERNMENT
Where Does Federal Money Come From?
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Where Does Federal Money Come From?
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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?
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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
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The money that the government runs
on is raised through taxes.
Where Federal Money Comes From
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There are several types of taxes…
Social Security
Corporate
Income Tax
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!
This includes estate taxes (when someone
dies) and taxes on goods brought from other
countries (tariffs).
Where Federal Money Comes From
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TOTAL: $2,381,000,000,000
Quick Review!
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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
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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…
The
Federal Budget
Where Federal Money Goes
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Where Federal Money Goes
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BUDGET: A plan for how money is earned and spent
Food
Housing
Clothes
Other Needs
Insurance
Car
Where Federal Money Goes
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FEDERAL BUDGET: A plan for how the government brings
in and spends revenue
Defense
Social Security
Medicare & Medicaid
Other Mandatory
Other Discretionary
Interest
Where Federal Money Goes
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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.
Federal Spending
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There are several ways the
federal government spends
money…
Federal Spending
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National Defense
Social Security
Income Security
Medicare
Health
Net Interest
These are just broad
categories!! Let’s break
them down…
Veterans Benefits
Education & Employment
Transportation
International Affairs
Administration of Justice
Resources & Environment
Science & Technology
Government
Agriculture
Community & Regional Development
Energy
FY 2010: National Defense
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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
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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
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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
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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
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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
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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
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The total estimated budget
for 2010 was
$3,600,000,000,000
Quick Review!
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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
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After all the revenue is
counted and all the
spending is tallied, there
are two possible outcomes
for the budget…
Two Possible Outcomes
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The government
The government
OR spends LESS than it
spends MORE than
raises in taxes so
it raises in taxes so
that there is money
that it must borrow
left over!
money!
Deficit
Surplus
Two Possible Outcomes
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Deficit
In a deficit there is no money left over
after the budget is laid out.
Trillions of Dollars
In fact the government must borrow
money to complete the budget!
Two Possible Outcomes
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Surplus
In a surplus there is money left over
after the budget is laid out.
Trillions of Dollars
The government can use the money
that is left over for other projects!
Two Possible Outcomes
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This chart shows that there has
been a deficit almost every
year since 1980.
Revenue Short of Budget in Billions
500
Deficit:
more money
spent than
earned
400
300
200
100
Surplus:
less money
spent than
earned
0
-100
-200
-300
1980
1985
1990
1995
2000
2005
Fill in the blank:
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Most of the revenue
raised by the
government comes
from _________tax.
income
Match the definition to the term:
$
money left over after the
budget is spent
budget
spending more than is
raised in taxes
federal budget
the plan for bringing in and
spending revenue
surplus
a plan for how money is
earned and spent
deficit
Match the definition to the term:
$
money left over after the
budget is spent
budget
spending more than is
raised in taxes
federal budget
the plan for bringing in and
spending revenue
surplus
a plan for how money is
earned and spent
deficit
Match the definition to the term:
$
money left over after the
budget is spent
budget
spending more than is
raised in taxes
federal budget
the plan for bringing in and
spending revenue
surplus
a plan for how money is
earned and spent
deficit
Match the definition to the term:
$
money left over after the
budget is spent
budget
spending more than is
raised in taxes
federal budget
the plan for bringing in and
spending revenue
surplus
a plan for how money is
earned and spent
deficit
REVIEW
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budget
a plan for how money is
earned and spent
federal budget
the plan for bringing in and
spending revenue
Way
surplus
to go!
deficit
money left over after the
budget is spent
spending more than is
raised in taxes
Choose the right answer:
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When the country
spends more than it
earns that is called a…
OR
Choose the right answer:
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When the country
spends less than the
amount of money it
earns it is called a…
OR
Choose the right answer:
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According to the chart
shown earlier, our
country usually has a…
OR
REVIEW
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That’s right!
Our country usually
spends more than it
earns, so we have a
deficit!