Chapter 16: Government Spends, Collects, and Owes Flashcards
Medicare
Government program that provides health care for the aged
Public goods
Goods or services that can be used by many individuals at the same time without reducing the benefit each person receives
Income redistribution
Government activity that takes income from some people through taxation and uses it to help citizens in need
Social-insurance programs
Government programs that pay benefits to retired and disabled workers, their families, and the unemployed
Social Security
Federal program that provides monthly payments to people who are retired or unable to work
Workers’ compensation
Government program that extends payments for medical care to workers injured on the job
Public-assistance programs/welfare
Government programs that make payments to citizens based on need
Supplemental Security Income
Federal programs that include food stamps and payments to the disabled and the aged
Temporary Assistance for Needy Families
State-run program that provides assistance and work opportunities to needy families
Medicaid
State and federal public-assistance program that helps pay health care costs for low-income and disabled persons
Externalities
Economic side effects or by-products hat affect an uninvolved third party; can be negative or positive (eg pollution)
Fiscal year
Year by which accounts are kept; for the federal government, October 1 to September 30 of the next year
Budget deficit
Situation when the amount of government spending exceeds its receipts during the fiscal year
Deficit financing
Government policy of spending more money than it is able to bring in through revenues
National debt
Total amount of outstanding debt for the federal government
Budget surplus
Situation when the amount of government receipts is larger than its expenditures during the fiscal year
Benefits-received principle
System of taxation in which those who use a particular government service support it with taxes in proportion to the benefit they receive; those who do not use the service do not pay taxes for it (eg gasoline)
Ability-to-pay principle
Principle of taxation in which those with higher incomes pay more taxes than those with lower incomes, regardless of the number of government services they use
Proportional tax
Tax that takes the same percentage of all incomes
Progressive tax
Tax that takes a larger percentage of higher incomes than of lower incomes; justified on the ability-to-pay principle
Regressive tax
Tax that takes a larger percentage of lower incomes than of higher incomes (eg food) (opposite of progressive tax)
Public-works projects
Publicly used facilities, such as schools and highways, built by federal, state, or local governments with public money
