Name: ___________________________

BALANCING THE FEDERAL BUDGET

The Federal government’s historical budget deficit is discussed and debated endlessly. Everyone has an opinion on how to balance the budget. Actual figures (more or less) for fiscal year 2006 are presented below. Rearrange the figures to eliminate the $454,806,000,000 deficit and balance the budget. You can either cut money going out or increase money coming in, but interest payments on the national debt cannot be adjusted. Good luck.

federal government REVENUE AND spending, 2008

MONEY COMING IN (RECEIPTS) (all figures in $millions) 2008Proposed

Value

Individual income taxes 1,145,746

Corporation income taxes 304,346

Social Security 900,363

Excise and custom taxes 94,902

Estate and gift taxes 28,844

Other 49,657

TOTAL, FEDERAL RECEIPTS 1378112

MONEY GOING OUT (OUTLAYS) (all figures in $millions)

Legislative 4,429

Judiciary 6,341Agriculture, Energy Interior, Transportation, and Miscellaneous

122,490

Defense 594,680

Education 65,957

Health and Human Service 700,501

Homeland Security 40,683

Housing and Urban Development 49,092

Justice 26,544

Labor 59,055

State 17,505

Treasury 97,651

Veterans Affairs 84,783

Social Security 657,799

Interest on National Debt (CANNOT BE CHANGED)

451,154 451,154

TOTAL, FEDERAL OUTLAYS 2,978,664

SURPLUS (DEFICIT) (454,806) 0.0

Name: ___________________________

APPLYING ECONOMIC PRINCIPLES TO EDUCATION

Recently, the U.S. Supreme Court ruled that cities could have voucher programs that give money directly to parents, and the parents can then choose between competing schools: public and private. The idea for promoting such a ruling was to create competition among schools. As with businesses, schools were expected to improve their products (how effectively they teach) to win students from competitors. Supposedly, that would mean an improvement in all schools, private and public, and would benefit many students.

1. Do you believe that such economic principles apply in both private and public organizations? Why or why not?

2. Are there other public functions that might benefit from more competition, including competition from private firms?