lectur3 - Fiscal Policy Overview Keynesian Economics 1...

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1 Fiscal Policy Overview Keynesian Economics
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2 FISCAL POLICY OVERVIEW Fiscal Policy: Deliberate use of taxes, transfer payments, and government payments for G & S to affect the level of production (GDP), income, prices & employment in the economy. (AKA: Government tax & Spend policy)
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3 FISCAL POLICY OVERVIEW 2005 Nominal GDP = $12.4339 trillion 2005 Federal Budget: $2.4722 trillion spending $2.1539 trillion revenues (taxes) $ 318.3 billion deficit (~$7.9 trillion Gross National Debt, 2005)
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4 Annual Federal Deficit
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5 A National Debt Clock May be found on the WWW at the following URL: http://www.brillig.com/debt_clock/ Or at the U.S. Treasury Public Debt site : http://www.treasurydirect.gov/govt/govt.htm
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6
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7 FISCAL POLICY OVERVIEW Federal Govt. spending in 2005 was 20.1% of GDP
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8 Historical Government Spending as Percent of GDP
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9 What is Government Spending? Direct govt. purchases some farm commodity programs, defense spending automobiles and trucks office furniture and supplies etc.
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10 What is Government Spending? Transfer payments Unemp. compensation benefits Welfare and food stamp programs Social Security and Medicare benefits Farm price supports deficiency payments, Farm Program Transition Payments
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11 Cut Welfare! What is Welfare? Temporary Assistance for Needy Families Women, Infant & Children’s Program (WIC) Medicaid Food Stamps Supplemental Security Income (SSI) Housing Assistance Any others?
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12 Cut Welfare! (1) Crime rate? Law enforcement cost? Prison cost? (2) Education Public Assistance
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13 Breakdown of Federal Expenditures: Direct benefit payments to individuals: ~ 60.3% of the total federal budget (AKA: Entitlement Programs)
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14 Breakdown of Federal Expenditures: Social Security: $523.4B Medicare Benefits: $333.8B $857.2B are ~57.5% of Entitlement Programs ~35% of total budget Voting Data
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15 Breakdown of Federal Expenditures: The remainder of direct benefit payments to individuals are ~ 42.5% of entitlements ~ $633.5 billion or $.6334 trillion ~ 25.6% of total budget
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16 Breakdown of Federal Expenditures: Food and Nutrition Assistance Amount % of Budget Food Stamps: $32.6B 1.32% Child Nutrition & Milk Prog. 11.9B .48 % Supp. Feeding Prog. (WIC) 4.9B .20% Total 49.4B 2.00%
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lectur3 - Fiscal Policy Overview Keynesian Economics 1...

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