Basic vocabulary regarding public policy

Debt and Deficit

• Public debt

Debt and deficit

• Public debt:– When a government (local, state, federal) borrows

money today with the promise to pay it back tomorrow

• How does a state or nation borrow money?– Can get loans from banks and other governments– Can sell promissory notes in small increments called

bonds – When the bonds come due, the government pays the

bondholders back, with interest.

Why does the USA borrow money?

• Because it spends more than it takes in in taxes.

• Every year, the balance between spending and taxes results in either a deficit or a surplus.

How much money does the government bring in?

1091

348

818

212

Fiscal 2011. Amounts in Billions.

Individual income taxesCorporate income taxesPayroll taxesOther

Spending, 2011 budget.

838

462

725

480

275

631

230

2

Spending, 2011, in billions.

Discretionary defenseDiscretionary non-defenseSocial SecurityMedicareMedicaidOther mandatoryDebt interestDisaster costs

What are:

• Social security?– income for Americans over the age of 65, based on the

amount they made during their working life

• Medicare?– pays for health care for Americans over the age of 65

• Medicaid?– pays for health care for poor Americans who fall below a

certain income level, partially paid by state governments

Spending, 2011 budget.

838

462

725

480

275

631

230

2

Spending, 2011, in billions.

Discretionary defenseDiscretionary non-defenseSocial SecurityMedicareMedicaidOther mandatoryDebt interestDisaster costs

What is discretionary non-defense spending?

Discretionary non-defense spending, 2011 Agriculture

Commerce

Education

Energy

Health and Human Services

Housing and Urban Development

Interior

Justice

Labor

State (non-defense related)

Transportation

Treasury

Corps of Engineers

EPA

General Services Admin.

NASA

National Science Foundation

Small Business Admin

Social Security Admin.

Corporation for national and community service

Other agencies

What is the budget deficit for 2011?

• Receipts: 2.303 trillion• Expenditures: 3.603 trillion• Deficit 1.300 trillion

Debt and Deficit

• Public debt• The national debt

• The NATIONAL DEBT is the total amount of money that the US federal government in Washington OWES to bondholders.

• This is the total amount of all debts PREVIOUSLY accumulated

The National Debt

1/1/1

951

1/1/1

955

1/1/1

959

1/1/1

963

1/1/1

967

1/1/1

971

1/1/1

975

1/1/1

979

1/1/1

983

1/1/1

987

1/1/1

991

1/1/1

995

1/1/1

999

1/1/2

003

1/1/2

0070.00

2,000,000,000,000.00

4,000,000,000,000.00

6,000,000,000,000.00

8,000,000,000,000.00

10,000,000,000,000.00

12,000,000,000,000.00

14,000,000,000,000.00

16,000,000,000,000.00

Demography: who are we?

• Population 2010: 308,745,538• Percent change from 2000: 9.7%

Race

% of population

WhiteBlackNative AmericanAsianHispanic/LatinoOtherTwo or more

Demography: who are we?• Income distribution: • Median household income: $51,914• Poverty rate: 15%

• Lowest 20% of the population (about 61 million people): – Household Incomes of $20,000 or less.

• Next lowest 20%: Incomes from $20,000 to $38,043

• Middle 20%: Incomes from $38,044 to $61,735

• Next highest 20% Incomes from $61,736-$100,065

• Highest 20%: Incomes above $100,065

Public Opinion

• What do most Americans think about:

• Taxes and spending• War and defense• Abortion• The environment

"In order to lower the nation's budget deficit, do you think taxes should be increased on households earning one million dollars a year or more, or

should the government address the budget deficit without increasing taxes on those households?“

CBS News/New York Times Poll. Feb. 8-13, 2012. N=1,197 adults nationwide. Margin of error ± 3.

Should increase Should not increase Unsure0

10

20

30

40

50

60

70

80

"Do you feel you pay more than your fair share in federal income taxes, less than your fair share, or is the amount you pay about right?“CBS News/New York Times Poll. Jan. 20-23,

2012. N=1,185 adults nationwide. Margin of error ± 3.

More than fair share

About Right Less than fair share Unsure0

10

20

30

40

50

60

"In order to balance the federal budget, which should be the main focus of lawmakers: increasing taxes or cutting

government services?“AP-GfK Poll conducted by GfK Roper Public Affairs & Corporate Communications. Dec. 8-12, 2011. N=1,000 adults nationwide.

Margin of error ± 4. Options rotated. 11/10: Co-sponsored by CNBC.

Increasing taxes

Cutting services

Both equally Neither Unsure0

10

20

30

40

50

60

70

Please tell me how important you think it is for Congress to reach agreement on each of the following BEFORE THE END OF THIS YEAR. First,

how important is it that Congress agrees on [see below]? Is it very important, somewhat important, not too important, or not at all important

for Congress to do this before the end of this year?"

020406080

Very important Somewhat important Not too importantNot important at all Unsure

United Technologies/National Journal Congressional Connection Poll conducted by Princeton Survey Research Associates International. Nov. 3-6, 2011. N=1,005 adults nationwide. Margin of error ± 3.7.

"Which of these comes closest to your view? Abortion should be generally available to those who want it. OR, Abortion

should be available, but under stricter limits than it is now. OR, Abortion should not be permitted.“CBS News/New York Times

Poll. Jan. 12-17, 2012. N=1,154 adults nationwide. Margin of error ± 3.

Generally available Available under stricter limits

Not permitted Unsure05

10152025303540

"Which comes closer to your point of view? As a general rule, do you think the United States should be ready and willing to use military force around

the world, or the United States should be very reluctant to use military force?" Version A (N=513, MoE ± 4.5) CNN/ORC Poll. Nov. 18-20, 2011. Adults

nationwide.

Ready and willing Very reluctant Unsure0

10

20

30

40

50

60

"In general, do you think it should or should not be the role of the United States to promote the establishment of democratic governments in other countries?“AP-GfK Poll conducted by GfK Roper Public Affairs & Corporate Communications. March 24-28,

2011. N=1,001 adults nationwide. Margin of error ± 4.2.

Should Should not Unsure0

0.51

1.52

2.53

3.54

4.55

"Turning to the issue of foreign aid, do you think the United States is now spending too little on foreign aid, about the right amount, or too much on foreign aid?“ Washington Post/Kaiser Family Foundation/Harvard University poll

conducted by Princeton Survey Research Associates. June 13-23, 2002. N=1,402 adults nationwide. MoE ± 3.

Too little Right amount Too much Don't know0

10

20

30

40

50

60

"What do you think the United States should do to get Iran to shut down its nuclear program: take military action against Iran now, use economic and diplomatic efforts but not take military action right now, or take no action against Iran at this time?“CNN/ORC Poll. Feb. 10-13, 2012. N=1,026 adults

nationwide. Margin of error ± 3.

Military action Economic and diplomatic efforts

No action Unsure0

10

20

30

40

50

60

70

"From what you've read and heard, is there solid evidence that the average temperature on earth has been getting warmer over the past few decades, or not?" If yes: "Do you believe that the earth is getting warmer mostly because of human activity such as burning fossil fuels, OR, mostly because of natural patterns in the

earth's environment?" Options rotated. Pew Research Center. Nov. 9-14, 2011. N=2,001 adults nationwide. Margin of error ± 3.

05

10152025303540

"Which of the following statements comes closest to your views on the origin and development of human beings? (1) Human beings have developed over millions of years from less advanced forms of life, but God guided this process. (2) Human beings have developed over millions of years from

less advanced forms of life, but God had no part in this process. (3) God created human beings pretty much in their present form at one time within the last 10,000 years or so." Options rotated 1-

3, 3-1. Gallup Poll. Dec. 10-12, 2010. N=1,019 adults nationwide. Margin of error ± 4.

Developed, guided by God

Developed, God had no part

God created in present form

Other/unsure05

1015202530354045

"Right now, which ONE of the following do you think should be the more important priority for U.S. energy policy: keeping energy prices low or protecting the environment?" Options rotated Pew Research/National

Journal Congressional Connection Poll, sponsored by the Society for Human Resource Management. June 10-13, 2010. N=1,010 adults nationwide. MoE ±

4.

Energy prices low Protecting environment Unsure0

10

20

30

40

50

60