Chapter 9- Public Money Flashcards
federal government budget
president proposes budget- congress approves budget
what is the federal budget deficit predicted to be for the year 2022?
expenditures= 6 trillion
revenue = 4.6 trillion
budget deficit = 1.4 trillion
national debt
the total of all money the federal government has borrowed over time to pay for annual deficits
what is the current total national debt?
$31 trillion
interest payments on the national debt
money that cannot be spent on other programs in the federal budget (5% of the entire budget)
how does the national debt accumulate?
federal government is permitted by law to borrow an unlimited amount of money, however interest must be payed on the debt every year
what is the current annual interest payment on the national debt?
$400 billion (5% of the budget)
mandatory expenditures
spending required by law
examples of mandatory expenditures
social security
medicare
medicaid/ children’s health programs
veteran’s benefits
discretionary expenditures
spending that is congress’s choice, but is not required
examples of discretionary expenditures
military and national security
other health programs
education
housing
energy
research
federal revenue sources
individual income taxes (45%)
social security taxes (32%)
business taxes (8%)
other (15%)
the two ways to view typical local government budgets
- public safety = 50% of expenditures and all other government services = 50%
- personnel costs = 65% of expenditures and costs of materials, vehicles, operating buildings, etc. = 35%
primary local government revenues (4)
sales tax
property tax
gas tax
fees for services provided
in general, within California, local revenues are not keeping pace with the costs of operations for three primary reasons:
- existing tax structure is no longer consistent with modern society
- state has taken local revenues for the purpose of balancing state budget
- employee pensions have become far more expensive than anticipated
