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| Chapter 16: Government and Economy |
| Get Involved |
| What does the United States government spend more money on: Social Security or foreign aid? The answer, by a large margin, is Social Security. In the fiscal year 2007, the federal government spent over twenty percent of its budget on Social Security, while under one percent of federal spending went to humanitarian aid to foreign nations. Yet repeated public opinion surveys suggest that, when asked to guess which program the federal government spends more on, Americans are more likely to guess foreign aid.
Such widespread gaps in public knowledge pose great challenges for American democracy. How can the government represent the citizen’s wishes, and effectively advocate on their behalf, when the public does not understand the true economic tradeoffs at stake? On the other hand, there are a wide variety of resources online, so that you may get involved in solving this problem by providing your peers with the true economic facts. |
| 1. How much do you know about where your federal taxpayer dollars go? Try your hand at the following budgetary simulation: http://www.kowaldesign.com/budget/money.html
The website asks you to guess what percentage of the budget goes into different categories. You will then be asked to balance the federal budget, by reducing budget outlays in categories of your choice. a. About what percentage of federal spending goes to paying interest on the national debt? |
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| 1b. What programs did you reduce spending for, to help reduce the national deficit? |
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| 1c. Why did you select those programs? |
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| 2. Take a look at budget summaries for the United States. The complete document, running thousands of pages long, can be intimidating. But there are concise tables online that help summarize key spending decisions: http://www.whitehouse.gov/omb/budget/
The above website is from the Office of Management and Budget. Visit this site and click on “Budget of the United States Government” for the most recent fiscal year, which should be at the top of the page. Search for a Table of Comments, and scroll down to a link for “Summary Tables.” For the Fiscal Year 2009, the link can be found at: http://www.whitehouse.gov/omb/budget/fy2009/summarytables.html a. How much, according to the first chart you see, does the federal government spend? |
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| 2b. How much money does it take in? |
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| 3. How much the government collects can also be a mysterious process to many Americans. A good repository for data on how the government collects money is the Tax Policy Center: http://www.taxpolicy.com/
Research this website. What are some of the key taxes that the United States government collects? |
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