© 2010, World
Peace One
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Part
11: Money and Politics
[This page is still being written.]
This section actually covers three different topics having to do with
money:
One: Understanding the buying power of large
sums of money. (For instance, how much is $10 billion relative
to the total budget of the Federal Gov't?)
Two: How much money is spent in politic campaigns?
Three: Understanding some basic economics
The Buying Power of Large Sums of Money
How much is $100 million dollars for a city like Chicago? Is that
a major portion of the budget? How much is $1 billion or
$100 billion on the federal level? Is that a drop in the
bucket, or a large percentage of the US federal budget. If you are
going to be able to make intelligent judgments regarding many issues,
you will need to know what any sum of money is relative to the whole
budget.
To answer one of the above questions, the 2009 budget for Chicago was
$2.5 billion. So 25 million dollars was about 1% of Chicago's annual
budget, one penny on the dollar.
On the federal level the President's budget for 2010 totals $3.55
trillion. Therefore $3.5 billion is 0.1% of the budget. $100
billion dollars is roughly 3% of what the country has to spend in
2010 (if Congress agrees and appropriates that much money.)
Below is a breakdown of the budget in 30 categories. Percentages in
parentheses indicate percentage change compared to 2009. This budget
request is broken down by the following expenditures:
- Mandatory spending: $2.184 trillion (-17.9%)
- $695 billion (+4.9%) - Social
Security
- $453 billion (+6.6%) - Medicare
- $290 billion (+12.0%) - Medicaid
- $0 billion (-100%) - Troubled
Asset Relief Program (TARP)
- $0 billion (-100%) - Financial stabilization efforts
- $11 billion (+275%) - Potential disaster costs
- $571 billion (-15.2%) - Other mandatory programs
- $164 billion (+18.0%) - Interest on National Debt
- Discretionary spending: $1.368 trillion (+7.0%)
How much money is spent in politic campaigns?
1. What's the cost of a typical House or Senate campaign?
In 2008 the average (mean) cost of a House race was $680,000 per
candidate but the highest cost was $11 million for all candidates in one
house race. For the more precious Senate seats, the average (mean)
cost was $2.5 million per candidate, but the most expensive race was $43
million for one Senate seat.
2. Roughly, what's the most recent cost of the Presidential
campaigns (all candidates)?
In the 2008 presidential race cost $1.75 billion dollars were spent
total by all 26 candidates.
In all the federal campaigns combined (the Congressional and the
Presidential races together) the total spent in 2008 was $3.1
billion. When you consider that that gives them the right to
influence the spending of a $3.5 trillion annual budget, then the
huge sum seems somewhat less fantastic.
3. What do campaigns spent all the money on? A variety of
things: staff salaries, travel costs, consultants, organizing campaign
events, polling and surveys, fundraising expenses, TV ads, direct
mail literature, and even making charitable donations.
[Source for these figures in this section: OpenSecrets.Org and
Wikipedia.Org.]
A piece of good news is that money isn't all-powerful in politics. In
the 2000 elections, for example, 8 out of the 20 candidates who raised the most money
lost their elections.
Questions to answer:
What is soft money?
What is hard money?
What is a PAC?
In the United States, a Political Action Committee, or PAC,
is the name commonly given to a private group, regardless of size,
organized to elect political candidates. Legally, what constitutes a
"PAC" for purposes of regulation is a matter of state and
federal law. Under the Federal Election Campaign Act, an organization
becomes a "political committee" by receiving contributions or
making expenditures in excess of $1,000 for the purpose of influencing a
federal election.
When an interest group, union, or corporation wants to contribute to
federal candidates or parties, it must do so through a PAC. These PACs
receive and raise money from a "restricted class," generally
consisting of managers and shareholders in the case of a corporation,
and members in the case of a union or other interest group. The PAC may
then make donations to political campaigns. PACs and individuals are the
only entities allowed to contribute funds to candidates for federal
office. Contributions from corporate or labor union treasuries are
illegal, though they may sponsor a PAC and provide financial support for
its administration and fundraising. Overall, PACs account for less than
thirty percent of total contributions in U.S. Congressional races, and
considerably less in presidential races.
Who can give to candidates, and who can't give?
Why is there public funding available for Presidential candidates?'
What is a 527?
A 527 group is created primarily to influence the nomination, election
appointment or defeat of candidates for public office. Although
candidate committees and political action committees (PACs) are also
created under Section 527, the term is generally used to refer to
political organizations that are not regulated by the Federal Election
Commission or by a state elections commission, and are not subject to
the same contribution limits as PACs.
Because 527 organizations do not make expenditures to directly advocate
the election or defeat of any candidate for federal elective office, but
do issue advocacy, they avoid regulation by the Federal Election
Commission.
Questions answered in B
1.
Basic Economics
http://www.amosweb.com/cgi-bin/prv_lsn.pl?lsn=1
A five-lesson free course.
http://www.investopedia.com/university/economics/default.asp
An eight-lesson free course.
The following are excellent background articles, usually about two pages
long, about various economic topics. These are from AMOSweb whose
principle author is Orley M. Amos, an economics professor from the
University of Oklahoma. Ignore the leading paragraphs in blue, since
they are about fictitious events -- as a kind of lighthearted
introduction.
About economic growth
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=16
"The Economics of Dueling Political Views"
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=36
About the Federal Deficit
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=21
About economic forecasting
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=15
About ten commonly-used economic indicators
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=17
About Social Security
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=43
About inflation
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=28
About foreign investment
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=pdg&c=dsp&k=23
For some current US economic statistics:
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=awb&c=stp
When ready, please continue on to the
last part, Total Advocacy. |
