How to Spend a Billion Dollars in One Day
In 2021 , the federal government collected $4.05 trillion in revenue.
Did you know?
Federal government revenue equates to about $128,000 of revenue per second.
In the time it takes you to read this statement, that's roughly $1 million in revenue.
$4.05 trillion is the same amount as 77 million individuals each receiving $52,500 per year.
That is roughly equal to the average annual salary of a Firefighter.
Source - Bureau of Labor Statistics
$4.05 trillion equates to the revenue of the top 19 companies in the Fortune 500.
Figures based on 2020 revenue reports of Fortune 500 Companies
The federal government collects revenue from a variety of sources, including individual income taxes, payroll taxes, corporate income taxes, and excise taxes. It also collects revenue from services like admission to national parks and customs duties.
What makes federal revenue increase or decrease?
The majority of federal revenue comes from individual and corporate income taxes as well as social insurance taxes. When individuals and corporations earn more money, they pay more in taxes, and thus federal revenue increases. Alternatively, if they make the same amount, but tax rates increase, the federal revenue will also increase. Decreases in federal revenue are largely due to either individuals or corporations making less money or a decrease in tax rates.
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Federal Revenue
In 2021 , the federal government spent $6.82 trillion .
Did you know?
Federal government spending equates to about $216,000 per second.
In just 10 seconds, that's $2,200,000 in spending.
$6.82 trillion is equivalent to a little less than $20,500 in spending per U.S. individual.
Source - U.S. Census Bureau
The federal government funds a variety of programs and services that support the American public. The federal government also spends money on interest it has incurred on outstanding federal debt, including Treasury notes and bonds.
Who controls government spending anyway?
Government spending can be broken down into two categories: mandatory and discretionary. Mandatory spending is determined by previous law and includes spending for programs like Social Security and Medicare. Discretionary spending is determined by the President and Congress each year in the budget and appropriations process. First, the President puts together a budget proposal and sends it to Congress. Then, the House and Senate both draft budget resolutions. Congress can change funding levels, as well as add or eliminate programs, taxes, and other sources of revenue. Once the budget resolutions have been finalized in the House and Senate, Congress reconciles the differences and votes on a final budget. The discretionary spending levels in the budget are divided among the twelve Appropriations Subcommittees, who then draft bills providing funding levels for the Departments, bureaus and agencies within their jurisdiction. After the House and Senate agree to a final funding level for each bill, they are sent to the President for approval or veto.
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Federal Spending
How did federal revenue and spending affect the deficit and federal debt in 2021 ?
In 2021 , the federal government spent $2.77 trillion more than it collected, resulting in a deficit.
Did you know?
$2.77 trillion breaks down to about $21,700 of deficit spending per household in 2021 .
Source - U.S. Census Bureau
$2.77 trillion equates to $5.3 million in deficit spending every minute for an entire year.
A deficit occurs when money going out exceeds the money coming in. In 2021 , the federal government spent more than it collected.
What happens when there is a surplus?
A surplus occurs when the government collects more money than it spends. The last federal surplus occurred in 2001 . The government primarily uses surpluses to reduce the federal debt.
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Federal Deficit
By the end of 2021 , the government had $28.43 trillion in federal debt.
Did you know?
If the federal debt was split evenly among households, your household's share would be roughly $222,200.
That is about equal to the median home price in Wyoming .
Source - U.S. Census Bureau
To pay for a deficit, the federal government borrows additional funds, which increases the debt. The total debt that the federal government owes is essentially the accumulation of deficits over time, minus debt repaid by any surpluses, plus debt that the Treasury owes to other parts of the federal government such as the Social Security program. Other activities contribute to the change in federal debt, such as changes in the Treasury's operating cash account and federal student loans.
Are federal debt and deficit the same thing? No, but they do affect one another.
Why can't the government just print more money?
While the Department of the Treasury prints actual dollars, "printing money" is also a term that is sometimes used to describe a means of monetary policy, which is conducted by the Federal Reserve. Monetary policy involves controlling the supply of money and the cost of borrowing. The Federal Reserve uses monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates on the behalf of the Congress. The federal government uses fiscal policy, or the control of taxation and government spending, to promote economic activity.
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Federal Debt
We might hope to see the finances of the Union as clear and intelligible as a merchant's books, so that every member of Congress, and every person of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.
Thomas Jefferson to Albert Gallatin, 1802
(edited)
Americans asked. We listened.
Your Guide to America's Finances is a re-invention of the Citizen's Guide to the Financial Report of the U.S. Government. This site was created in response to the public's desire to learn more about the financial picture of the United States. Where does the money come from? Where does it go? What are the trends over time? This guide was created to make federal financial information open and accessible to all - reflecting the very principles that our founding fathers set forth when the United States was formed.
Your Guide to America's Finances is brought to you by the U.S. Department of the Treasury
How to Spend a Billion Dollars in One Day
Source: https://datalab.usaspending.gov/americas-finance-guide/