Question

Which of the following accounted for the second largest percentage of total federal government expenditures in 2007 ? a. Income security b. National defense c. Interest on the national debt d. Education and health

Short answer

In 2007, the second largest percentage of total federal government expenditures was (d) Education and health, accounting for 19.6% of total expenditures.

Step-by-step solution

Research and obtain data on the percentage shares of each category mentioned in the options. This data can be found through government websites or trusted data sources. #Step 2: Organize the data#

Organize the data, either in a table or a list format, to compare the percentages of each category easily. #Step 3: Identify the second largest percentage#

Compare the federal government expenditure percentages of the given categories and find the category with the second largest percentage. The federal government expenditure percentages for 2007 are as follows: a. Income security: 14.6% b. National defense: 20.1% c. Interest on the national debt: 8.5% d. Education and health: 19.6% #Step 4: Determine the answer based on the data#

Based on the given data, option (d) Education and health accounted for the second largest percentage of total federal government expenditures in 2007, with 19.6% of total expenditures.

Key concepts

Income Security

Income security represents a significant portion of federal government expenditures. It includes various programs designed to provide financial assistance to individuals and families. These programs aim to ensure that everyone has a basic level of income to cover essential needs such as food, clothing, and shelter.
Income security programs typically include:

• Social Security: Provides benefits to retired workers, disabled individuals, and survivors of deceased workers.
• Unemployment Insurance: Offers temporary financial assistance to people who have lost their jobs through no fault of their own.
• Supplemental Security Income (SSI): Assists elderly, blind, and disabled people who have little or no income.
• Temporary Assistance for Needy Families (TANF): Aims to help families achieve self-sufficiency through financial aid and supportive services.
• Food Assistance: Programs like SNAP provide food-purchasing assistance to low-income individuals and families.

These programs help reduce poverty and stimulate economic activity by providing spending power to those in need. By supporting individuals financially, income security programs contribute significantly to social stability and economic well-being.

National Defense

National defense is crucial for maintaining a country's security and sovereignty. Federal government expenditures on national defense encompass various costs associated with protecting the nation from external threats.
These expenses cover:

• Defense Departments: Includes the Department of Defense and its various branches, such as the Army, Navy, Air Force, and Marine Corps.
• Military Personnel: Salaries, benefits, and training for active duty and reserve forces.
• Weapons and Equipment: Development, procurement, and maintenance of military hardware.
• Military Operations: Costs incurred during overseas deployments, training exercises, and logistical operations.
• Research and Development: Investments in new technologies and innovations to maintain a technological edge over adversaries.

The goal of national defense spending is to deter aggression and ensure the safety of citizens and the nation’s interests, both domestically and internationally.

Education and Health

Spending on education and health reflects the federal government's commitment to improving the quality of life for its citizens. These expenditures focus on ensuring access to essential services that promote well-being and development.
Key areas within education and health expenditure include:

• Education: Funding for public schools, higher education grants, and student loan programs.
• Health Care: Medicare and Medicaid programs, which provide health insurance to seniors, low-income families, and individuals with disabilities.
• Public Health: Initiatives to promote healthy lifestyles and prevent diseases through vaccination programs, nutrition support, and health education campaigns.
• Research: Subsidies for medical and educational research to foster innovation and improvements in services.

These areas receive substantial funding because they are vital for creating a skilled workforce, promoting public health, and enhancing productivity and overall quality of life.

Interest on National Debt

Interest on the national debt represents the cost the government incurs by borrowing money to cover its expenditures when tax revenues are insufficient. This is a mandatory expense, meaning it is required to be paid irrespective of other budgetary priorities.
Understanding this concept helps illuminate why it remains a consistent component of federal expenditures:

• Obligatory Payment: The government must make these payments to honor its borrowing commitments.
• Repayment Terms: Varies depending on the duration and type of debt instruments, such as treasury bonds.
• Impact on Budget: High interest costs can limit the government's ability to fund other discretionary programs.
• Economic Factor: Higher national debt typically leads to more interest being paid over time.

Managing the interest on national debt is crucial for maintaining fiscal stability and ensuring long-term economic health. As the debt rises, so do the interest obligations, making it an important aspect of federal financial strategy.