Grade 9-12
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Lesson

Government Spending: Why Do We Spend the Way We Do?

Updated: October 18 2019,

Introduction

Income after taxes is used for two purposes: spending and saving. Choosing between consuming things today versus saving today in order to consuming some things later through savings reflects the economic problem of scarcity. Due to scarcity, choices must be made. Just as you must make choices on how to use your income, the federal government must also make difficult choices on how to use tax dollars to fund a variety of programs.

Task List

In this lesson you will learn about how the ways the federal government uses tax dollars. You will also learn how the role of government has changed over time, along with the mix of programs funded by the government.

Process

Part Isupreme

  1. Print a copy of Activity 1. Review the definitions of government purchases, government transfer payments, and government interest rates.
  2. Go to https://www.infoplease.com/business-finance/us-economy-and-federal-budget/federal-budget-2004-2010 to locate examples of the different types of expenditures and write examples of each on Activity 1. Review your answers with your classmates.
  3. Complete Activity 2. Print a copy of Activity 2A and record your answers if your teacher requests you to do so.

View Interactive Activity

Part II

View Interactive Activity

  1. coinsLook at Activity 3 and answer the multiple choice questions above.
  2. Your teacher will divide you into six groups. Each group will be assigned one of the following time periods:

  3. Print a copy of Activity 4 by clicking on the group above that you have been assigned to. Use the listed websites and the information on Activity 3 to answer the questions.
  4. Your teacher will call on the groups to share their answers. Record the information on Activity 5.
  5. Review the information on Activity 5. Use this information to answer the following. What factors have caused the shift in priorities for federal spending? Cite examples.

Conclusion

After responding to the open-ended questions below, discuss them with the rest of your class.

View Interactive Activity

  1. What are the three categories of government spending?
     
  2. Give an example of each type of spending.
     
  3. What government programs have grown significantly in recent years? What ones have declined in recent years?
     
  4. What are the causes for changes in priorities in government spending over the last 40 years? Site examples for both purchases and transfers.

Assessment Activity

white houseThe President of the United States is suggesting increased spending for a missile defense system. He is also proposing a major long-term tax cut. Predict some possible outcomes for the federal budget categories and the relative importance of each outcome during the next ten years.