Federal Budget, Deficits, and Debt

Flashcards covering deficits, debt, social security , and healthcare.

Congressional Budget Office

A think tank for Congress that provides economic analysis and forecasts.

Federal Deficit

Money flowing out of the government; outlays are bigger than tax revenue collection.

Surplus

Money flowing into the government; taxes are greater than outlays.

Attrition

Reducing employment by not replacing employees who leave or retire.

Automatic Stabilizers

Government programs that automatically increase spending or decrease taxes during economic downturns.

Total Amount of the Deficit

Government borrowing each year.

Total Deficit

The sum of net interest payments plus the primary deficit.

Primary Deficit

Outlays other than interest minus taxes.

Outlays

Government spending plus transfer payments plus interest payments.

Mandatory Spending

Government has to make these payments. These are obligations that we've already locked into.

Discretionary Spending

New projects or new distributions of income.

Social Security

Retirement benefits paid to retirees that contributed to the Social Security system during their working lives.

Medicare

Subsidized health insurance for people in retirement in their 70s, 80s, 90s.

Medicaid

Health insurance for people in poverty.

CHIP

Health insurance for children of people in poverty.

Social Security

Provides retirement and disability benefits to eligible recipients that paid into social security systems forced savings program in the form of payroll taxes.

FICA

12.6% of your total compensation. 6.1% is paid by the firm, 6.1% is paid by the worker and it goes into that forced savings program.

Payroll Tax

A flat tax. Everyone pays the same amount. And then when you hit a maximum, when you're rich enough you don't have to pay any more that year.

Social Security

Forecast to only have enough money to pay three quarters of promised benefits.

Pay As You Go System

Young people pay into the system and that same money is allocated to the old people and the government just keeps an accounting record of how much they owe you.

Medicare

Provides subsidized insurance for eligible recipients. All elderly people in retirement that paid into the system get free hospital insurance.

Pay as you go

Benefits come out of individual personal government savings account.

Excise Taxes

These are luxury taxes.

Sales Taxes

Taxes on goods and services.

Income Security Programs

Includes SNAP, Supplemental Nutrition Assistance Program.

SSI

Continues until age 67.

Entitlement Spending

Something you feel entitled to, you have a contract.