Hey Mr Taxman

budget2010

This week we will look at fiscal policy.  Fiscal policy is government actions in the economy: taxing and spending.  Most government spending is mandatory – it has already been promised.  The remainder is discretionary meaning it is optional and decided on yearly.

Besides to defense, where does that discretionary money go?

 

discretionary-spending-2015

 

When taxes don’t equal spending the government runs with a surplus or a deficit which can add to or decrease the federal debt.  Speaking of which, did you know the debt is over $19 trillion and rising by the second.  Go ahead, click on the link watch it rise.  I’ll wait. So what about that ginormous debt – will it help the US or bury us?  We will get some tools and perspective on that question this week.

federal_debt_held_by_the_public_1790-2013
US debt as a percent of GDP

Before next week:

  •  Watch the following videos:

Ep 26: Fiscal Policy

Ep 27: Crowding Out & Lags

Ep 28: Taxes and Budget

The Difference between Debt and Deficit: An Explainer

  • Complete the study guide. Remember to print out the guide and bring it to take notes on in class

— As google doc here

–As pdf  Fiscal policy study guide here

For your procrastination:

Podcast about welfare,

http://www.marketplace.org/2016/04/28/world/magic-bureaucrat

 

 

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