FrontPage : Why do people say that “money is power?”
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FrontPage: Why do people say that “money is power?”
The Last Word: Finish 6.1 for Wednesday
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Today, I will scare you…
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Congressional Powers:
Powers of the Purse
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What are the Power$ of the Purse?
The Power$ of the Pur$e are the MOST IMPORTANT of all Congressional powers…
Why…?
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Let’s discuss the first “Power of the Pur$e”…
But first, let’s learn a bit of wisdom from a founding father…
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Ben Franklin said that in life, only 2 things are certain…
What are these 2 things…?
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One is Death…
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The other is…
Taxes…
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The Power of Taxation…
• Congress has the sole power to levy (“set” or “apply”) many different national taxes…
• Why does Congress tax the American people
• Revenue
Originally, there was only one source of revenue for the national government…tariffs.
What are Tariffs?
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So, what did the government do to fix this?
Passed the 16th amendment:Created the income tax…–This has become a
major source of income for the government…
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…And a despised part of everyone’s paycheck!
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Sources of revenue - 2010
42%
40%
9%6%
3%
Individual Income TaxesSocial Insurance TaxesCorporate Income TaxesOtherExcise Tax
Total Revenue = $2.1 Trillion
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$pending Power When Congress allocates (spends, or
gives) money to a program, agency or other part of the government, this funding is called…– Appropriations
All bills for taxing or spending must start in which house of Congress?
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Federal Spending - 20106% 12
%
19%
20%20%
23%
Interest on the DebtOther Required SpendingDiscretionaryDefenseSocial SecurityMedicare/Medicaid
Total Spending – $3.4 Trillion
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What we “choose” to spend on…
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The Federal Budget
This is an outline of how much the government will spend in a given year
Where is all of this spending recorded so we can keep track of it?
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The Federal Budget:Terms to Know
Budget Surplus– Occurs when government spends less
in a single year than it brings in Budget Deficit
– Occurs when the government spends more in a single year than it brings in
**For example: In 2010, the US government took in about $2.1 trillion and spent about $3.4 trillion.
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Why would the government need to spend more than it brings in?
When this happens, Congress must use another “Power of the Pur$e”…
**Which power of Congress enables it to spend more than it has?
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The Power to Borrow Money
But when Congress does this, it contributes to the…
The total accumulated amount that government owes; Occurs because more deficit years occur than surplus years.
National Debt
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The estimated population of the United States is 311,485,011so each citizen's share of this debt is $47,755.61.
The National Debt has continued to increase an average of
$3.97 billion per day since September 28, 2007!
Source: http://www.brillig.com/debt_clock/
The US National Debt on Oct 14th 2011 was:
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The increase of the National Debt
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$cary, isn’t it?
What is the consequence of all this “deficit spending”?– How might we start to reduce our
yearly deficit, and our national debt?