Background on Budget & Economy
|Spending in FY2000's $1.8 trillion budget||Federal revenue sources|
$405 billion (23%) Social Security payments
$328 billion (18%) Medicare/Medicaid payments
$215 billion (12%) interest on the National Debt
$226 billion (13%) other ‘mandatory’ payments
$262 billion (15%) national defense
$330 billion (19%) other ‘discretionary spending’.
$900 billion (48%) individual income taxes
$637 billion (34%) social insurance (FICA)
$189 billion (10%) corporate income taxes
$157 billion (8%) other taxes & duties
The most recent budget surplus estimate (as of June 2000) is $1.9 trillion over 10 years, or $4.2 trillion including the Social Security Trust Fund.
The accumulated borrowing is the ‘National Debt’ that the government must repay in the future. The current federal debt stands at about $5.5 trillion, which is the equivalent of roughly $20,000 per person. The federal government pays about $200 billion in annual interest on the national debt.
However, the government reports the budget surplus or deficit from a ‘Unified Budget’ which does include the Trust Fund. Hence the growth of the Fund offsets the shortfall in the budget. In 1998, the budget surplus was reported as $40 billion on the unified budget. Discounting the Trust Fund, the budget would have been in deficit by $50 billion.
Greenspan’s primary responsibility is to set the interest rates that the government pays on its bonds. Those rates in turn determine bank interest rates, mortgage lending rates, and other interest rates.
When the Federal Reserve Bank feels that there is to much inflationary pressure, they are likely to raise interest rates to slow the economy down. Hence, Greenspan raises interest rates (‘tightens money’) when he sees the economy as ‘overheating,’ and lowers interest rates (‘loosens money’) when he sees deflation threatening.
The longest economic expansion in US history ended in October 2001. During 2001, Greenspan lowered interest an unprecedented 10 times in one year, to provide ‘monetary stimulus’ to the lagging economy. President Bush pushed for ‘fiscal stimulus’ by sending out $300 tax rebate checks to millions of taxpayers.
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|Other candidates on Budget & Economy:||Background on other issues:|
President George W. Bush
Vice President Dick Cheney
Former Pres.Bill Clinton
Sen.Hillary Clinton (D,NY)
Mayor Rudy Giuliani (R,NYC)
Former V.P.Al Gore
Ambassador Alan Keyes
Sen.John McCain (R,AZ)
Gov.Jesse Ventura (I,MN)
War & Peace