Exploring the Money Matters of the Federal Government

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Money Matters

• Exploring the Money Matters of the Federal
  Government

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Where Does Federal Money Come From?

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Where Does Federal Money Come From?

When the government needs more money, it cant
simply start printing it.
It has to come from somewhere!
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Where Does Federal Money Come From?

TAXES!
You might have heard people complain about paying
taxes from time to time, but without taxes our
government couldnt run some very important
programs that help people!
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Where Federal Money Comes From

The money that the government runs on is raised
through taxes.
Thats right! The money raised by the government
through taxes is called revenue!
This money is called REVENUE!
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Where Federal Money Comes From

There are several types of taxes
Social Security
Income Tax
This tax is taken to provide retired people with
income they need. In 2010 it was 6.2 of your
total income!
This tax is based on a percentage of what you
make. The more you make, the higher percentage
you pay!
Corporate Income Tax
Excise Tax
These are taxes paid on certain goods like
alcohol, cigarettes, jewelry, and gas.
Just like the personal income tax, corporations
must pay income taxes!
Other Taxes
This includes estate taxes (when someone dies)
and taxes on goods brought from other countries
(tariffs).
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Where Federal Money Comes From

TOTAL 2,381,000,000,000
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Quick Review!

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
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Where Federal Money Goes

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
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Where Federal Money Goes

Whats a BUDGET?
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Where Federal Money Goes

Budget A plan for how money is earned and spent
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Where Federal Money Goes

Federal Budget A plan for how the government
brings in and spends revenue
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Where Federal Money Goes

A budget is
A. a type of plan for printing money.
I see! A budget is a plan for receiving and
spending money.
B. something the government uses to measure
things.
C. a plan for receiving and spending money.
D. a pet bird.
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Federal Spending

There are several ways the federal government
spends money
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Federal Spending

These are just broad categories!! Lets break
them down
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FY 2010 National Defense

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
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FY 2010 Social Security

When people are retired or disabled, Social
Security helps them get the financial assistance
they need.
Total Social Security Spending
724,000,000,000
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FY 2010 Income Security

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
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FY 2010 Medicare

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
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FY 2010 Health

Doctors visits, medicines, emergency care these
are necessities for everyone! Insurance for the
needy, disease research and control, and
childrens health insurance all fall into this
category.
Total Health Spending
386,000,000,000
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FY 2010 Other Spending

• There are many other categories of government
  spending. These include
• Education
• Science
• Environment
• Development
• Transportation

Other Government Spending
677,000,000,000
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FY 2010 Spending

The total estimated budget for 2010 was
3,600,000,000,000
Hundreds
Thousands
Trillions!
Billions
Millions
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Quick Review!

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.
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Two Possible Outcomes

After all the revenue is counted and all the
spending is tallied, there are two possible
outcomes for the budget
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Two Possible Outcomes

The government spends LESS than it raises in
taxes so that there is money left over!
The government spends MORE than it raises in
taxes so that it must borrow money!
OR
Deficit
Surplus
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Two Possible Outcomes

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!
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Two Possible Outcomes

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!
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Two Possible Outcomes

This chart shows that there has been a deficit
almost every year since 1980.
Deficit more money spent than earned
Surplus less money spent than earned
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Fill in the blank

Most of the revenue raised by the government
comes from _________tax.
income
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Match the definition to the term

budget
money left over after the budget is spent
federal budget
spending more than is raised in taxes
surplus
the plan for bringing in and spending revenue
deficit
a plan for how money is earned and spent
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Match the definition to the term

budget
money left over after the budget is spent
federal budget
spending more than is raised in taxes
surplus
the plan for bringing in and spending revenue
deficit
a plan for how money is earned and spent
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Match the definition to the term

budget
money left over after the budget is spent
federal budget
spending more than is raised in taxes
surplus
the plan for bringing in and spending revenue
deficit
a plan for how money is earned and spent
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Match the definition to the term

budget
money left over after the budget is spent
federal budget
spending more than is raised in taxes
surplus
the plan for bringing in and spending revenue
deficit
a plan for how money is earned and spent
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REVIEW

a plan for how money is earned and spent
budget
federal budget
the plan for bringing in and spending revenue
Way to go!
surplus
money left over after the budget is spent
deficit
spending more than is raised in taxes
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Choose the right answer

When the country spends more than it earns that
is called a
A) Surplus
B) Deficit
OR
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Choose the right answer

When the country spends less than the amount of
money it earns it is called a
A) Surplus
B) Deficit
OR
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Choose the right answer

According to the chart shown earlier, our country
usually has a
A) Surplus
B) Deficit
OR
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REVIEW

Thats right! Our country usually spends more
than it earns, so we have a deficit!