In 2005 the interest payment the government had to

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Unformatted text preview: ame way that people make interest payments on their general credit card bills (such as Visa or MasterCard). In 2005, the interest payment the government had to make on the national debt was approximately $177 billion, or 7.2 percent of total federal government spending. If we combine national defense spending, spending on homeland security, income security spending, spending on retirement and disability, Social Security spending, Medicare spending, and spending on the national debt, we see that we have accounted for 75.8 percent of all federal government spending. Just looking at national defense (plus homeland security) and Social Security (plus Medicare) accounts for over half of all federal spending, at a total of 54.6 percent. Exhibit 14-7 shows projected federal government spending for the period from 2006 to 2011. EXHIBIT 14- 7 national debt The sum total of what the federal government owes its creditors. Projected Federal Government Projected Federal Government Spending Spending Year Year Projected spending Projected spending (billions (billions of dollars) dollars) 2006 2006 $2,5 $2,511 2007 2007 2,625 ,625 2008 008 2,7 2,754 2009 2009 2,8 2,8 81 2010 2010 3,0 3,008 2011 2011 3, 3,15 7 Source: Internal Revenue Service (2005). Section 2 The Budget: Deficits and Debt 377 14 (364-389) EMC Chap 14 11/18/05 10:58 AM Page 378 Person Benefits Costs Vote A $130 $100 Yes QUESTION: Does the federal government B 120 100 Yes spend much on education? What percentage of total federal spending goes for education? C 102 100 Yes D 50 100 No E 10 100 No In 2002, the federal government spent approximately $54.6 billion on elementary and secondary education, which was about 2.2 percent of total federal spending. Keep in mind, though, that most spending on elementary and secondary public education occurs at the state level. In other words, state governments are the major spenders on education. Spending on education usually takes the biggest slice of a state government’s budget. In 2002, per-student spending in a public school was $7,524. In other words, it takes about that much to educate you if you are in a public school. If you would like some detailed data on schools in your state, you can go to www.emcp .net/schools. Once there, simply click on the state you are interested in. You will find information on total number of schools in your state, total number of students, total number of teachers, pupil/teacher ratio, total dollar amount spent on education, and much more. ANSWER: The Costs and Benefits of Government Spending Programs According to economists, a government spending program is not worth pursuing unless the benefits of that program outweigh the costs. In other words, if the program generates $100 billion in benefits and costs $40 billion, then we have $60 billion in net benefits, and the program is worth pursuing. In reality, though, things don’t always turn out this way. Sometimes spending programs that have greater costs than benefits get p...
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This document was uploaded on 01/16/2014.

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