1. Introduction to Economics Johnstown High School Mr. Cox
Federal Budget
Introduction to Economics
Johnstown High School
Mr. Cox

2. Federal Budget The earning and spending plan of our federal government
Revenue – all money brought in to a company, government
Expenditure – all money spent

3. Surplus/Deficits
Balanced Budget: when the government collects the same in revenue (taxes) as it spends.
Budget Surplus: When the government takes in more revenue than it spends.
Budget Deficit: When the government spends more than it takes in.
National Debt: money owed due to sustained deficits
External Debt: money owed to foreign entities
Foreign governments, companies, investors, etc

4. Mandatory Spending Programs which our government must spend legally
Entitlement programs
Social Security
Medicare/Medicaid
Welfare Programs
65% of all spending in mandatory

5. Discretionary Spending
Def. Spending category where government can choose how to fund. (29% of all spending)
Ex. Defense (#1 discretionary spending), education, research, student loans, technology, law enforcement, national parks and monuments, the environment, housing, transportation, disaster aid, foreign aid, farm subsidies, etc.
Subsidies – Gov will help consumers pay for certain goods
Vaccines
Solar Panels
Both have positive externalities

6. 2015 Expenditures: Fed Government

7. Revenues
Majority of money the government makes comes from taxation (95%)
Personal Income Tax
Payroll Tax (FICA)
Corporate Tax
Excise Taxes

8. 2015 Revenues: Fed Government

9. Entitlement Programs
Def. Social welfare programs that people are “entitled to” if they meet certain requirements. Congress must fund these programs.
Entitlements are very expensive because Congress cannot control how many people receive the benefits.
Ex. Social Security (#1spending), Medicare, Medicaid, Food Stamps, etc.