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Econ Chapter 10
Government Spending
| Term | Definition |
|---|---|
| Pork | a line-item budget expenditure that circumvents normal budget procedures and benefits a small number of ppl or businesses |
| Public Sector | the part of the economy made up of local, state, and federal governments |
| Private Sector | part of economy made up of private individuals and businesses |
| Transfer Payment | payment for which gov receives neither goods nor services in return |
| Grant-in-Aid | transfer payment from one level of gov to another, no compensation |
| Subsidy | government payment to encourage or protect a certain economic activity |
| Distribution of Income | way in which the nation’s income is divided among families, individuals, or other designated groups |
| Federal Budget | annual plan outlining proposed expenditures and anticipated revenues |
| Fiscal Year | 12-month financial planning period that may or may not coincide with calendar year |
| Appropriations Bill | legislation authorizing spending for certain purposes |
| Budget Deficit | a negative balance after expenditures are subtracted from revenues |
| Budget Surplus | a positive balance after expenditures are subtracted from revenues |
| Mandatory Spending | federal spending authorized by law that continues without the need for annual approvals by Congress |
| Discretionary Spending | spending for federal programs that must receive annual authorization |
| Medicare | federal health-care program for senior citizens, regardless of income |
| Medicaid | joint federal-state medical insurance program for low-income people |
| Balanced Budget Amendment | constitutional amendment requiring government to spend no more than it collects in taxes and other revenues, excluding borrowing |
| Intergovernmental Expenditures | funds that one level of government transfers to another level for spending |
| Congressional Budget Office (CBO) | nonpartisan congressional agency evaluates impact of legislation / projects future revenues and expenditures from legislation |
| Deficit Spending | annual gov spending in excess of taxes and other revenues |
| National Debt | total amount borrowed from investors to finance the government’s deficit spending |
| Balanced Budget | annual budget in which expenditures equal revenues |
| Trust Funds | special account used to hold revenues designated for a specific expenditure, such as Social Security, Medicare, or highways |
| Per Capita | per person basis; total divided by population |
| Crowding-Out Effect | higher-than-normal interest rates and diminished access to financial capital faced by private borrowers when they compete with government borrowing in financial markets |
| "Pay-As-You-Go" Provision | requirement that new spending proposals or tax cuts must be offset by reductions elsewhere |
| Line-Item Veto | power to cancel specific budget items without rejecting the entire budget |
| Spending Cap | limits on annual discretionary spending |
| Entitlement | program or benefit using est. eligibility requirements to provide health, nutritional, or income supplements to individuals |
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