ShmoopTube

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And finance Allah shmoop What is the federal budget And

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no it's not an oxymoron Okay people sing it with

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me I am the very model of a modern budget

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Federal cost trillions Whether Congress is conservative or liberal that's

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a four with twelve zeros for commas and no decimal

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Most funds come from income taxes both corporate and individual

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Ah third from payroll tax is blah blah blah OK

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at the music Air people boy Yeah that was Gilbert

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and Sullivan Ask your great grand parents about that one

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Anyway Here's the money that comes in from the federal

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government It's what they spend We've got forty seven percent

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from personal income taxes That's like revenue to government on

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our backs Those air the tax returns you have to

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file of recorder and then finally every April fifteenth Then

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there's another nine percent of federal revenue that comes from

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corporate taxes Basically income taxes for Cos The next big

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chunk comes from payroll taxes yet another tax on corporations

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It makes up about a third of the federal government's

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revenue And that's the money that's earmarked or tagged for

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Social Security that while you and your employer page time

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you get your paycheck Well then you've got some little

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stuff that trickles in You've got tariffs and small stuff

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that doesn't really add up to a whole lot anyway

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So that's how the money comes in Those bear the

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revenues that run our government members of Congress I'll figure

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out what they want to spend money on Basically once

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they make a deal they need to get the president

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to sign off on it And if it's a big

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budget item and basically that's how budgets get made So

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how does the federal government spend our money Well three

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fifth of the total budget goes to social programs that

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stuff like Social Security the unemployed Medicare Medicaid and all

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those types of programs Three fifth that sixty percent of

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our total budget goes for all this stuff Right down

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here we were listing for you They're for free After

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that well about a sixth of the budget goes to

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the military Another six percent gets spent on debt service

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That's just paying the interest expense on the bonds the

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U S Government has issued to make up for its

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deficit spending What is deficit spending It means that when

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we do our budget we take in less money than

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we spend So we have a deficit or earnings losses

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If we record operation basically year after year after year

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and we have to borrow money to make up for

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the annual massive losses Yeah runs a company like that

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All right well let's look a little closer The federal

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government spending here there's too broad categories that spending falls

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into There's mandatory spending and that stuff that's been budgeted

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by previous legislation lease already been committed to Contractually we

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have to spend the money There's no optionality here It's

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set in stone is part of the social programs the

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so called entitlements you hear about in the press all

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the time You know stuff like Social Security unemployment Medicare

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Medicaid And if we don't spend that money for all

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the old people who are sick and miserable and dying

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while they would be even sicker and more miserable and

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dying faster so we have to spend that money The

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other big part of the federal budget is called discretionary

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spending This is also stuff that lawmakers can negotiate on

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a year to year basis The biggest part of the

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discretionary budget is the military well The budget also includes

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benefits for veterans and that's like stuff like Gil mental

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care for people who did one hundred ninety seven jumps

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into Afghanistan and now have PTSD It's also people who

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got Lim shot off defending our country So they call

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that discretionary But it really isn't There's a number of

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other smaller expenses that fit into this part of the

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budget There's money for housing money for education money for

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international aid pretty much anything else But it's important to

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remember that the mandatory spending and the military make up

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the biggest part of the Total Budget III What we

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spend more money on ad in the service on the

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dead I'ii interest payments and all of that Together those

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programs equal eighty two percent of the federal budget OK

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about those debts Well each year the government out spends

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its revenue like we said and that's what's called our

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deficit spending here So to make up for this the

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government has to borrow more and more and more money

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And it does so by issuing bonds T bills chinos

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long bones all that kind of stuff Every year these

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additional deaths get thrown onto the ever growing pile of

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debt And this is what's called the national debt Right

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You see signs that calculate our national debt how fast

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it's growing and all that Well as of press time

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right now that total national debt tops twenty one trillion

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dollars and it's growing all the time All right so

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let's go out on a big finish here Ready Oh

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I am the very model of a modern budget federal

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iris Men in black make sure revenue states accountable Spending

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mandatory These things they say are not negotiable Discretionary choosing

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stuff by mainly troops and generals Don't forget interest charges

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These things are not ephemeral Sorry we're almost done here

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to pay for this We run up debts that some

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might call incredible To keep this up we better keep

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our credit rating credible and pray to pay for all

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the programs running within the state Several I am the

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very model of a modern budget federal who feeling a

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little lightheaded here All right I think I'll just light 00:05:00.153 --> [endTime] out for a second federal budget Good luck

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