What would you buy if you had… $1 million? $1 billion? $17 trillion?

National Budgeting

National Budget Created by the government A plan for how to spend the government’s money in one year – Where does the government’s money come from? TAXES! Goal: Tax revenue – expenses = 0

Surpluses & Deficits If the government has money left over after ALL of its expenses, it will have a SURPLUS – Money left over – When was the last time we had a budget surplus? 2000 If the government spends more money than it has, it will have a DEFICIT – Money needs to be borrowed to pay for the remaining expenses

National Debt Any time the government has to borrow money to pay for expenses (because of a deficit), it adds to the NATIONAL DEBT – The total amount of money the government has borrowed and NOT paid back The government must pay interest on its debt – Just like normal people who are in debt

The National Debt

Impact on Us Government solutions to reach their goal (tax revenue-expenses=0) are not easy – Raise taxes – Cut spending (Medicaid, food stamps, social security, government jobs, etc) Increasing interest costs on the national debt – That money could be spent on things that we need (helping students pay for college)

What can you do about this? Not much…. Vote for politicians who will make changes to reduce the debt – Not easy to do, why?

Quick Review 1.What is it called when the government doesn’t spend all of the money it has in one year? Budget Surplus 2.What continues to add up each time the government has a deficit and has to borrow money? National Debt 3.Why should you care about the national debt? Taxes might go up Spending on programs you need might be cut Interest payments take money away from things you could use