Warm-up:• Why was the first computer developed?

• Who made the first successful commercial computer?

• What happened to the labor unions because of globalization and the US service economy?

The U.S. 21st-Century

The Economy

Government & Economy• Each year the government collects taxes and uses

that money to provide services across the nation and globe

• If the government spends more than it takes in, it is called deficit spending

• GDP-gross domestic product-the total value of all goods and services produced domestically by a nation during a year.

• GNP-gross national product- the total value of all final goods and services produced annually by a nation

21st-Century Economy• “dot.com” sector collapsed in April 2001• Stock Market began a substantial decline, lasting

over a year• Housing “bubble” begins collapsing finally

creating chaos in late 2007, early 2008.– Thousands of homes go into foreclosure after a decade

of “shady, risky” lending with no one questioning.• Annual income rose 20% for wealthiest 20% of

population, rose 8% for next 20%, remained flat for remaining 60% with actual drops in bottom 20%, creating a two-tiered economy.

21st-Century Economy (cont)

• By 2008, top 1% of population averaged over $1.1 million annually, while bottom 90% only averaged $31 thousand.

• Outsourcing US jobs becomes prevalent among top US corporations starting in the early 2000s, even as tax dollars bailed them out.

• The 2000s also saw the coming of the “digital divide” in that low and poor income homes have no computers or digital access skills now almost mandatory for employment

2008 Recession

• Emergency Economic Stabilization Act 2008– Rescued many large banks and brokerage houses

• American Recovery and Reinvestment Act 2009– Gave money to state & local governments for projects

• TARP (troubled asset recovery program)– $80 billion to “bail-out” auto industry-Chrysler & GM– Auto industry paid back money with interest (2014 last

of government involvement)• Indiscriminate and risky banking practices

• DIRECTIONS: Below is a list of the major categories of federal government spending. Write the percentage YOU THINK should be spent on each in the blanks (should total 100%).

• Federal Employee and Veterans (former military) Benefits ______ • Scientific and Medical Research ______ • Medical Benefits (Medicare for the elderly, Medicaid for the poor,

CHIP for children) ______ • Safety Net Programs (food stamps, free school lunches, etc. for the

poor)______ • Defense and National Security (includes the military) ______ • International Aid (money sent to other countries) ______ • Interest Payments on the National Debt ______ • Transportation and Infrastructure (highways, bridges, etc.) ______ • Social Security Benefits (money paid to retirees, widows, orphans,

etc.) • Education ______

Activity: