The Role of Government: The Federal Government and Fiscal Policy
Case Assignment Resources:

The U.S. Government Printing Office Published a “A Citizen’s Guide to The FederalBugdet.” While this is not available for more recent years, it has some useful information about the federal budget.

GPO Access: Citizen’s Guide to the Federal Budget: Fiscal Year 2001. Retrieved February 17, 2011from:

For more recent data, the New York Times has an interactive on President Obama’s 2011 Budget Proposal and includes information on the 2010 budget:

New York Times: Obama?s 2011 Budget Proposal: How It?s Spent. Retrieved on February 17, 2011 from:

Another good reference with more recent data:

Center of Budget and Policy Priorities. Policy Basics: Where do Our Federal Tax dollars go? Retrieved February 17, 2011 from:

Please address the following questions in a 3 page essay.

1. In your own words, summarize the United States Budget. What is the largest source of revenue for the U.S. government? What is the largest expenditure for the U.S.? Do you think these budget priorities are correct? Explain.

2. Use Chart 1-2 from the Citizen’s Guide to respond to the following: In 1998, or the last year charted, which of the industrialized nations allocated the smallest share of its GDP to government spending (federal, state, and local combined)? Which industrialized nation allocated the highest percentage of GDP to government spending?

3. Clink on this interestic graphic of the U.S. GDP Growth Rate:

U.S. GDP Growth Rate. Retrieved February 17, 2011 from:

Assume you are an advisor to President Obama. How is a recession defined? Is the U.S. currently in a recession? What specfic policy tools could be used to stimulate the economy?

4. Finally, one of the greatest debates in economics is between Keynesian Economists who believe that government intervention is necessary to restore the economy to its potential GDP while Classical Economists believe the market will correct itself. There are many resources on this topic from the internet including:

Federal Reserve Bank of San Francisco. Major Schools of Economic Theory: Keynesian School. Retreived February 17, 2011 from:

Yergin, Daniel and J. Stanislaw. (1998) “The Chicago School” Excerpt from Commanding Heights pp. 145-149. Retreived February 17, 2011 from:

Do you think there are certain economic crises that require government intervention (i.e Great Depression, Auto Industry failure, etc.)? Why or why not? (There is no right or wrong answer, but be sure to support your ideas.)