Budget of the United States government: The Office of Management and Budget provides access to the budget of the United States government at its Web site: www.gpoaccess.gov/usbudget/citizensguide.html. "A Citizen's Guide to the Federal Budget" provides information about the budget and the budget process for the general public. Access the guide for the most current fiscal year presented on the Web site and complete the following requirements:
a. What percentage of gross domestic product does spending for federal programs represent? What percentage does state and local government spending represent?
b. What was the amount of total receipts? Where did they come from?
c. What was the amount of total outlays? Where did they go?
d. Explain the process used by the government to create a budget.
e. How is the federal budget monitored?
f. What is meant by a budget surplus? A budget deficit?
g. Why is a budget deficit important? A budget surplus?
Attached is the final response.
THE BUDGET OF UNITED STATES
Spending as a Percentage of GDP
In the US economy, total government spending represents about 28% of the GDP. The private spending makes up the rest of the 72%. The 28% of government spending is sub-divided as:
• Programs administered by the federal government-16%
• Local Spending -12%
State and local Spending-9%
Federal Government Grants - 2%
Receipts are the money that the government uses to pay its bills and comes mostly from taxes. Following table shows the amount of receipts for three years 2004 - 2006:
2004 (in $ billions) 2005 (in $ billions) 2006 (in $ billions)
Total Revenues 2,339 2,438 2,529
The sources of receipts in the order of their weight in the total receipt are:
• Individual income taxes
• Corporate income taxes
• Payroll taxes: include Social Security taxes, Medicare taxes, unemployment insurance taxes, and Federal employee retirement payments.
• Excise taxes: these apply to various products like alcohol, tobacco, transportation fuels, and telephone services. The government earmarks some of these taxes to support certain activities including highways and airports.
• Estate and gift taxes
• Customs duties
• Miscellaneous revenues
Examples of estate and gift taxes, customs duties, and miscellaneous revenues include Federal Reserve earnings, fines, penalties, and forfeitures.
The Federal government collects around $2.0 trillion. The break-up of this amount among several categories is as given below:
Social Security 23
Non-defense discretionary 19
National defense 16
Net interest 10
Other mandatory 7
Other Means-tested entitlements 6
• The largest Federal ...
The expert accesses and analyzes the budget of the United States.