Economics: Government and Economics: Government and the Economythe Economy

Chapter 14Chapter 14Hoover High SchoolHoover High SchoolDes Moines, IowaDes Moines, Iowa

Mr. VanVleetMr. VanVleet

ActivityActivity

Predict what would happen if Des Predict what would happen if Des Moines lost 10,000 people who were Moines lost 10,000 people who were in the tax bracket of $128,000 to in the tax bracket of $128,000 to $278,000 and at the same time $278,000 and at the same time gained 20,000 people in the $0-gained 20,000 people in the $0-$25,000 tax bracket.$25,000 tax bracket.– What would this do to the schools, What would this do to the schools,

roads, parks, services, hospitals and any roads, parks, services, hospitals and any other government entity?other government entity?

Chapter 14 Section 3Chapter 14 Section 3Federal SpendingFederal Spending

Objectives:Objectives:– Distinguish between mandatory and Distinguish between mandatory and

discretionary spendingdiscretionary spending– Identify categories of discretionary Identify categories of discretionary

spendingspending

Learning Target:Learning Target:

Examine the rationale for taxingExamine the rationale for taxing

Mandatory Mandatory Spending/Entitlement ProgramsSpending/Entitlement Programs

Social SecuritySocial Security

MedicareMedicare

MedicaidMedicaid

Food StampsFood Stamps

Retirement for federal workersRetirement for federal workers

Veterans pensionsVeterans pensions

Unemployment insuranceUnemployment insurance

Discretionary SpendingDiscretionary Spending

DefenseDefense -National Parks -National Parks

EducationEducation -Housing-Housing

TrainingTraining -Transportation-Transportation

Scientific Research -Disaster AidScientific Research -Disaster Aid

Student LoansStudent Loans -Foreign Aid-Foreign Aid

TechnologyTechnology -Farm Subsidies-Farm Subsidies

EnvironmentEnvironment -Land Management-Land Management

Questions to ponder???Questions to ponder???

Why is the topic of adding new Why is the topic of adding new entitlement programs so entitlement programs so controversial?controversial?

Should politicians have knowledge in Should politicians have knowledge in all of these matters or just all of these matters or just specialize?specialize?

What happens when we spend more What happens when we spend more money then we take in with taxes?money then we take in with taxes?

U.S. Debt ClockU.S. Debt Clock

As of December 9As of December 9thth, 2010, 2010

Almost 14 trillion dollars!!!

Discretionary Spending ActivityDiscretionary Spending Activity

Construct an argument (15pts.)Construct an argument (15pts.)– You are head of a department in charge You are head of a department in charge

of federal discretionary spending on of federal discretionary spending on page 373page 373

1) Make an argument for why you deserve 1) Make an argument for why you deserve more federal moneymore federal money

2)Prioritize your reasons2)Prioritize your reasons

3) Make sure you support your claims3) Make sure you support your claims

Example ArgumentExample Argument

Land ManagementLand Management1)1) We deserve a larger portion of the We deserve a larger portion of the

federal budget because…federal budget because…

2)2) Prioritize reasonsPrioritize reasons1)1) We need $ to clean up the oil spill in Gulf We need $ to clean up the oil spill in Gulf

Of MexicoOf Mexico

2)2) We need $ to build more wind turbines in We need $ to build more wind turbines in the Rocky Mountainsthe Rocky Mountains

3)3) We need $ to continue the expansion of re-We need $ to continue the expansion of re-introducing native speciesintroducing native species

Example ArgumentExample Argument

3) Support of claims3) Support of claims– The oil spill in the Gulf of Mexico The oil spill in the Gulf of Mexico

damaged wildlife and fisheries that are damaged wildlife and fisheries that are important to U.S. commerce and important to U.S. commerce and environment. A coordinated effort to environment. A coordinated effort to clean up the spill will help re-vitalize the clean up the spill will help re-vitalize the gulf region.gulf region.

14-3 Assessment14-3 Assessment

You Decide!You Decide!– Which categories of federal spending Which categories of federal spending

would you lower? Which would you would you lower? Which would you raise? Give specific reasons for the raise? Give specific reasons for the changes you suggestchanges you suggest

– Worth 15 pointsWorth 15 points

The Federal Tax DollarThe Federal Tax Dollar