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Federal Budget and Economic Policy

Federal Budget and Economic Policy. So what do we spend money on?. That’s right! 7% of our money goes to just paying for the interest on all the money we have borrowed. Journal Writing. Does this pie chart place emphasis on the things that you think are important in our country?

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Federal Budget and Economic Policy

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  1. Federal Budget and Economic Policy

  2. So what do we spend money on? That’s right! 7% of our money goes to just paying for the interest on all the money we have borrowed

  3. Journal Writing • Does this pie chart place emphasis on the things that you think are important in our country? • What should emphasis be placed on?

  4. Types of Spending • Mandatory Spending- programs that require that the federal government pay back the contributions previously taxed from the citizens • Discretionary Spending- spending on programs like defense, roads, schools, and running the government • Budget Processes • President puts together budget (EOP’s Office of Management and Budget compiles it) • House of Representatives- Spending Bills originate here • Passed in HoR and Senate • President signs or vetos • Can be passed by 2/3 votes in HoR and Senate

  5. Past Presidential Economic Programs

  6. Two Schools of Economic Thought • Laissez-Faire, Classical Capitalism, Supply-side policies • Allows the private sector to compete and run the economy on their own • Taxes should be low, profit motives should be rewarded, and helping the rich conduct more business will help the middle class and poor find more jobs. • Trickle down Economics/Voodoo Economics • Reduce regulations on business and business will be able to create more jobs (and therefore wealth) for poorer

  7. Think, Pair, Share • Do you find anything wrong with this ideology? What is left unaccounted for or why is it right?

  8. Two Schools of Economic Thought • Keynesian • Named after economist John Maynard Keynes • New Deal type policies • Argues that when the economy stalls and falls into recessions/depressions, Congress should lower taxes and create jobs. When the economy overheats and suffers from inflation, congress should raise taxes and cut jobs. • Assumption is that laissez-faire policy leaves the nation vulnerable to drastic cycle swings. • Monetary • When the economy is in recession, government should force lower interest rates (the Fed) and buy bonds from the public. Most conservatives also believe in this intervention in addition to their supply side beliefs.

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