Globalization Lesson Plan
Title: Financial Management Basics -Governments of China and U.S. Receipts and Outlays
Subject: Introduction to the basics of national financial management through a
comparison of actual receipts and outlays for 2007 in China and in the United
States
Author: Theresa Gauthier
Grade Level: 9th through 1st year college
Time Duration: 1 class period
Overview: Discussion of receipts and outlays of federal budgets is an extension
to the study of personal financial management. Finding percents, reading pie
charts, working with scientific notation is prerequisite
Objectives: After completing this lesson plan, the student will have
•
Examined basic terms of financial management applied to national
government.
•
Analyzed national debt per citizen in China vs Unites States.
•
Compared sources of income in China vs United States.
•
Compared various expenditures in China vs Unites States.
•
Calculated missing percents and create pie chart.
•
Written large numbers in scientific notation and calculated with scientific
notation
Materials for each student:
•
Student handout
•
Protractor for pie chart
Activities and Procedures:
Students complete the handout during class period.
Conclusions:
You may choose to have students research and write a one-page paper.
Suggestions are:
1. The Value Added Tax for the U.S.
2. The Flat Tax proposal
3. Social Security and retirement in China
4. Social Security in the United States
5. Healthcare in China
6. Healthcare in the United States
7. Updated data for current fiscal year
8. Who pays Individual Income Tax in U.S. and China
Theresa Gauthier, Mathematics Instructor
Cleveland Community College
April 28, 2008
Globalization Lesson Plan for Mathematics
I.
SHARE THE FOLLOWING INFORMATION WITH YOUR STUDENTS
In theory, financial management of governments works much like personal or
corporate management of finances.
A.
Each has receipts and outlays (income and expenses). Each requires a
comparison between receipts and outlays. This difference is called net income.
A surplus occurs when receipts exceed outlays. A deficit occurs when outlays
exceed receipts. Thus net income can be either positive or negative. (The
conversion rate yuan to dollars used in handout is 7.5158)
B.
When a deficit occurs more money is spent than is collected in a single
year. A family, business, or government can survive a deficit by spending savings
or borrowing money. The U.S. government has run a yearly deficit for most of the
last 50 years.
C.
Debt is the accumulation of borrowed money over many years. The fiscal
year 2007 ended September 30th with a deficit of $161 billion and the national
debt that accumulated during the last 50+ years was $8.993 trillion. There are
roughly 300 million citizen of the United States. If we divide the debt evenly
among all citizens, how much would you owe? (Space is provided in student
handout for this work).
$8.993×1012
= $29,9977
3 ×10 8 persons
D.
Who are the holders of this almost $9 trillion debt? $5.049 trillion is
publicly held debt in the form of Treasury securities. Of the public debt roughly
$2.22 trillion is held by foreign investors, according to David Walker, comptroller
general of the United States. (This information is provided because the question
is often asked by studens)
The remaining $3.944 trillion of debt is held by the U.S. government itself
in the form of loans made to the U. S. Treasury from “surpluses” in the trust funds
of entitlement programs such as Social Security, other retirement programs, and
Medicare.
II.
Use the student handout to discuss U.S. receipts and outlays for the
fiscal year 2007.
A.
Discuss the basic makeup of government receipts (a breakdown of the
“other” category is included with the instructor copy of the student handout.)
B.
Discuss the basic makeup of government outlays?
III.
Introduce 2007 receipts and outlays for the government of China
using the student handout for China.
Discuss similar issues as with the U.S.
1. The central government of China had a deficit of 245 billion yuan in 2007.
Their debt was 35015.280 million yuan in 2006 (National Bureau of
Statistics of China). The population of China was roughly 1330 million
people (U.S. Census Bureau). Have the student find the debt for 2007
and the share for each person in China and convert this to U.S. dollars.
IV.
Compare United States vs China in receipts and outlays.
A.
Discuss difference in sources of income. Value Added Tax (VAT) is a
form of indirect tax applied to the value added at each stage of production
(primary, manufacturing, wholesale and retail).
B.
V.
Discuss differences and similarities in expenditures.
Extension.
Students research a topic of interest concerning government outlays and
receipts.
Theresa Gauthier, Mathematics Instructor
Cleveland Community College
April 28, 2008 Governments of China and U.S. -- Receipts and Outlays
Student Handout
2007 U.S. Federal Receipts
Type of Tax Levied
Individual Income Tax
Social Security & Other Payroll
Taxes
Corporate Income Tax
Excise Tax and Customs Duty
Tax
Other
Total
In
In
Billion
Billion
Dollars
Percent
Yuan
1153
44%
8666 847
367
32%
14%
6366 2758 86
4
2457
3%
7%
100%
646 30 18466 1. Add percents to the pie chart below.
2007 U.S. Federal Outlays
Types of Spending
National Defense
Medical and Health Care
Social Security
Agriculture and Natural Resources
Education
Interest on Debt
Other
Total
In
In
Billion
Billion
Dollars Percent Yuan
690
%
5185.9
719
%
5403.9
626
%
4704.9
99
%
744.06
66
%
496.04
239
% 1796.28
728
%
5471.5
3167
% 23802.5
2. Find the Percent of the total U.S. federal outlays the percents in the table
below. (round to nearest whole percent)
2007 U.S. Federal
Outlays
2007 China Central Government Receipts
Types of Taxes Levied
Domestic VAT & Consumption Tax
In
In Billion
Billion
Yuan
Percent Dollars
1768
34%
235
VAT & Consumptions-Imports & Exports
Business Tax & Corporate Income Tax
Individual Income Tax
Other
Total
1535
330
5130
23%
30%
6%
6%
100%
157
204
42
44
683
3. Find the approximate receipts for VAT & consumption taxes on imports
and exports and approximate receipts for Individual Income Tax.
4. Create the pie chart below.
China 2007 Central
Government Receipts
5. Compare the sources of income in China vs United States.
2007 China Central Government Outlays
Types of Spending
National defense
Medical and Health Care
Social Security & Employment matters
Agriculture, Forestry and Water
Education
Interest on Debt
Industry, Commerce, Banking
Other
Total
In Billion
Yuan
Percent
348
21%
66
4%
230
14%
127
8%
108
6%
99
6%
243
14%
474
27%
1696
100%
In
Billion
Dollars
46
9
31
17
14
13
32
63
226
2007 China
Central
Government
Outlays
7. The debt of the Chinese Government was 35.015280 billion yuan (466
million dollars) in 2006, and the deficit in 2007 was 200 billion yuan (26,611
million dollars) find the national debt in 2007.
8. There were approximately 1.33 billion people in China in 2007. Find the
personal share of national debt for each person in China.
9.
Compare expenditures in China vs Unites States.
Governments of China and U.S. -- Receipts and Outlays
Student Handout Answer Sheet
2007 U.S. Federal Receipts
Type of Tax Levied
Individual Income Tax
Social Security & Other Payroll
Taxes
Corporate Income Tax
Excise Tax and Customs Duty
Tax
Other
Total
In
In
Billion
Billion
Dollars
Percent
Yuan
1153
44%
8666 847
367
32%
14%
6366 2758 86
4
2457
3%
7%
100%
646 30 18466 1. Add percents to the pie chart below.
2. The debt of the U.S. Government was approximately $9 trillion in 2007.
There were approximately 300 million people in the U.S. in 2007. Find the
personal share of national debt for each person in the U.S.
$8.993×1012
= $29,9977
3 ×10 8 persons
3. Who are the holders of this almost $9 trillion debt? $5.049 trillion is
publicly held debt in the form of Treasury securities. Of the public debt
roughly $2.22 trillion is held by foreign investors, according to David
Walker, comptroller general of the United States.
.
The remaining $3.944 trillion of debt is held by the U.S. government itself
in the form of loans made to the U. S. Treasury from “surpluses” in the
trust funds of entitlement programs such as Social Security, other
retirement programs, and Medicare.
2007 U.S. Federal Outlays
Types of Spending
National Defense
Medical and Health Care
Social Security
Agriculture and Natural Resources
Education
Interest on Debt
Other
Total
In
In
Billion
Billion
Dollars Percent Yuan
690
22%
5185.9
719
23%
5403.9
626
20%
4704.9
99
3%
744.06
66
2%
496.04
239
8% 1796.28
728
23%
5471.5
3167
100% 23802.5
4. Find the percent of the total U.S. federal outlays the percents in the table
below. (round to nearest whole percent)
2007 U.S.
Federal Outlays
2007 China Central Government Receipts
Types of Taxes Levied
Domestic VAT & Consumption Tax
VAT & Consumptions-Imports & Exports
Business Tax & Corporate Income Tax
Individual Income Tax
Other
Total
In Billion
Yuan
Percent
1768
34%
1179
23%
1535
30%
319
6%
330
6%
5131
100%
In
Billion
Dollars
235
157
204
42
44
683
5. Find the approximate receipts for VAT & consumption taxes on imports and
exports and approximate receipts for Individual Income Tax.
6. Create the pie chart below.
China 2007 Central
Government Receipts
7. Compare the sources of income in China vs United States.
2007 China Central Government Outlays
Types of Spending
National defense
Medical and Health Care
Social Security & Employment matters
Agriculture, Forestry and Water
Education
Interest on Debt
Industry, Commerce, Banking
Other
Total
In Billion
Yuan
Percent
348
21%
66
4%
230
14%
127
8%
108
6%
99
6%
243
14%
474
27%
1696
100%
In
Billion
Dollars
46
9
31
17
14
13
32
63
226
2007 China
Central
Government
Outlays
8. The debt of the Chinese Government was 35.015280 billion yuan (466
million dollars) in 2006, and the deficit in 2007 was 200 billion yuan (26,611
million dollars) find the national debt in 2007.
9. There were approximately 1.33 billion people in China in 2007. Find the
personal share of the budget for each person in China.
10. Compare expenditures in China vs United States.