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Econ: What is the Federal Budget? 0 Views


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What is the Federal Budget? The Federal budget is the US government’s list of spending allocations for a designated year. It includes domestic and international obligations, personnel payrolls, materiel, and aid, inclusive of military and other government departmental operations. It is negotiated on and proposed by Congress and is then presented to the President for veto and/or signing.

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Transcript

00:00

And finance Allah shmoop What is the federal budget And

00:06

no it's not an oxymoron Okay people sing it with

00:09

me I am the very model of a modern budget

00:12

Federal cost trillions Whether Congress is conservative or liberal that's

00:16

a four with twelve zeros for commas and no decimal

00:19

Most funds come from income taxes both corporate and individual

00:23

Ah third from payroll tax is blah blah blah OK

00:26

at the music Air people boy Yeah that was Gilbert

00:29

and Sullivan Ask your great grand parents about that one

00:31

Anyway Here's the money that comes in from the federal

00:34

government It's what they spend We've got forty seven percent

00:37

from personal income taxes That's like revenue to government on

00:40

our backs Those air the tax returns you have to

00:43

file of recorder and then finally every April fifteenth Then

00:47

there's another nine percent of federal revenue that comes from

00:49

corporate taxes Basically income taxes for Cos The next big

00:54

chunk comes from payroll taxes yet another tax on corporations

00:58

It makes up about a third of the federal government's

01:00

revenue And that's the money that's earmarked or tagged for

01:03

Social Security that while you and your employer page time

01:07

you get your paycheck Well then you've got some little

01:09

stuff that trickles in You've got tariffs and small stuff

01:12

that doesn't really add up to a whole lot anyway

01:15

So that's how the money comes in Those bear the

01:17

revenues that run our government members of Congress I'll figure

01:20

out what they want to spend money on Basically once

01:22

they make a deal they need to get the president

01:24

to sign off on it And if it's a big

01:26

budget item and basically that's how budgets get made So

01:30

how does the federal government spend our money Well three

01:33

fifth of the total budget goes to social programs that

01:36

stuff like Social Security the unemployed Medicare Medicaid and all

01:41

those types of programs Three fifth that sixty percent of

01:44

our total budget goes for all this stuff Right down

01:47

here we were listing for you They're for free After

01:49

that well about a sixth of the budget goes to

01:51

the military Another six percent gets spent on debt service

01:55

That's just paying the interest expense on the bonds the

01:58

U S Government has issued to make up for its

02:01

deficit spending What is deficit spending It means that when

02:04

we do our budget we take in less money than

02:08

we spend So we have a deficit or earnings losses

02:12

If we record operation basically year after year after year

02:15

and we have to borrow money to make up for

02:18

the annual massive losses Yeah runs a company like that

02:22

All right well let's look a little closer The federal

02:24

government spending here there's too broad categories that spending falls

02:27

into There's mandatory spending and that stuff that's been budgeted

02:31

by previous legislation lease already been committed to Contractually we

02:35

have to spend the money There's no optionality here It's

02:38

set in stone is part of the social programs the

02:40

so called entitlements you hear about in the press all

02:43

the time You know stuff like Social Security unemployment Medicare

02:47

Medicaid And if we don't spend that money for all

02:49

the old people who are sick and miserable and dying

02:52

while they would be even sicker and more miserable and

02:54

dying faster so we have to spend that money The

02:57

other big part of the federal budget is called discretionary

03:00

spending This is also stuff that lawmakers can negotiate on

03:03

a year to year basis The biggest part of the

03:05

discretionary budget is the military well The budget also includes

03:09

benefits for veterans and that's like stuff like Gil mental

03:12

care for people who did one hundred ninety seven jumps

03:15

into Afghanistan and now have PTSD It's also people who

03:18

got Lim shot off defending our country So they call

03:22

that discretionary But it really isn't There's a number of

03:24

other smaller expenses that fit into this part of the

03:26

budget There's money for housing money for education money for

03:30

international aid pretty much anything else But it's important to

03:34

remember that the mandatory spending and the military make up

03:37

the biggest part of the Total Budget III What we

03:39

spend more money on ad in the service on the

03:42

dead I'ii interest payments and all of that Together those

03:45

programs equal eighty two percent of the federal budget OK

03:49

about those debts Well each year the government out spends

03:52

its revenue like we said and that's what's called our

03:54

deficit spending here So to make up for this the

03:56

government has to borrow more and more and more money

03:59

And it does so by issuing bonds T bills chinos

04:02

long bones all that kind of stuff Every year these

04:04

additional deaths get thrown onto the ever growing pile of

04:07

debt And this is what's called the national debt Right

04:11

You see signs that calculate our national debt how fast

04:14

it's growing and all that Well as of press time

04:16

right now that total national debt tops twenty one trillion

04:21

dollars and it's growing all the time All right so

04:23

let's go out on a big finish here Ready Oh

04:26

I am the very model of a modern budget federal

04:28

iris Men in black make sure revenue states accountable Spending

04:32

mandatory These things they say are not negotiable Discretionary choosing

04:36

stuff by mainly troops and generals Don't forget interest charges

04:40

These things are not ephemeral Sorry we're almost done here

04:43

to pay for this We run up debts that some

04:45

might call incredible To keep this up we better keep

04:47

our credit rating credible and pray to pay for all

04:51

the programs running within the state Several I am the

04:54

very model of a modern budget federal who feeling a

04:57

little lightheaded here All right I think I'll just light 00:05:00.153 --> [endTime] out for a second federal budget Good luck

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