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Oct 14, 2009. Savings and Investment The Savings and Investment Identity Deficits and Debt Problems with the debt. Today’s News. The Algebra of Savings and Investment. GDP = C+I+G+NX expenditures = output= income Ignore ROW, so Y = C+I+G Y – C – G = I Y – C – G = S - PowerPoint PPT Presentation
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Oct 14, 2009
I. Savings and InvestmentA. The Savings and Investment Identity
II. Deficits and DebtIII. Problems with the debt
Today’s News
The Algebra of Savings and Investment
1. GDP = C+I+G+NX expenditures = output= income
2. Ignore ROW, so Y = C+I+G3. Y – C – G = I4. Y – C – G = S5. S = Y (– T + T) – C – G6. S = (Y – T – C) + (T – G)7. Total Savings = Private Savings +
Public Savings
Where does the Federal government get its
revenues?1. Income Taxes
____%2. Social Security Taxes
____%3. Corporate Taxes
____%4. Sales Taxes
____%5. Property Taxes
____%6. Excise Taxes (gas, tobacco, alcohol)
____%7. Tariffs
____%8. Estate Taxes
____%9. How much tax revenue did the federal
government collect in FY08? $ ____
Where does the Federal government get its revenues?
(FY08)1. Income Taxes ($1,146 b)
45%2. Social Security Taxes ($900 b)
36%3. Corporate Income Taxes
($304b) 12%4. Sales Taxes ($0)5. Property Taxes ($0)6. Excise Taxes (gas, tobacco, alcohol) ($67b)
3%7. Tariffs ($28b) 1%8. Estate Taxes ($29b) 1%9. Other ($50b) 2%10. How much tax revenue did the federal
government collect in FY08? ($2,524 billion)
(Source: http://www.gpoaccess.gov/usbudget/browse.html
Where does the Federal government spend its
money?$ Amount Percent of Total
Defense
Social Security
Medicare
Medicaid
Interest
Income security
Other retirement
International
Other
Total 100%
Where does the Federal government spend its
money?$ Amount ($bil) Percent of Total
Defense $616 21%
Social Security $617 21%
Medicare $456 15%
Medicaid $201 7%
Interest $254 9%
Income security $260 9%
Other retirement $129 4%
International $29 1%
Other $421 14%
Total $2,983 100%
Federal Surplus/Deficit (G-T)
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
19
9620
0020
0420
08-1,600
-1,400
-1,200
-1,000
-800
-600
-400
-200
0
200
400
US Deficit
$ bi
llion
s
Recent Deficit/Surplus
1980
1982
1984
1986
1988
1990
1992
19
9419
9619
9820
0020
0220
0420
0620
08-1,600
-1,400
-1,200
-1,000
-800
-600
-400
-200
0
200
400
US Recent Surplus/Deficit
$ bi
llion
s
Deficit/Surplus as Share of GDP
1941
1944
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
19
9519
9820
0120
0420
07-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
US Deficit as Share of GDP
Recent History19
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
92
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
US Deficit as Share of GDP
Debt (not deficit)
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
19
9620
0020
0420
080
1,000
2,000
3,000
4,000
5,000
6,000
7,000
US Public Debt
$ bi
llion
s
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
0%
20%
40%
60%
80%
100%
120%
US Debt as Share of GDP
19801982
19841986
19881990
1992 1994
19961998
20002002
20042006
2008
-10%
-5%
0%
5%
10%
15%
20%
25%
Revenues, Spending, Deficit % of GDPSpending
Revenues
Deficit
International Comparisons