Government Spending Assignment Discussion

Government Spending Assignment Discussion

Government spending involves the amount of money used by a government for the provision of services such as healthcare, defense, education, and social protection. The government can spend directly in meeting the needs of its people or it may acquire goods and services to be used in future investment. Also, government spending occurs in two major ways including recurrent expenditure and capital or development expenditure (Oladele, 2017)Government Spending Assignment Discussion. The recurrent expenditure involves paying salaries, and wages and buying goods and services for consumption, however, the capital expenditure is the amount a government used in creating assets such as road constructions, housing units, irrigation, water connectivity, and power projects among others.

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Government spending affects families negatively or positively. When a government spends too much on unbudgeted projects and programs the economy is affected and individuals and society suffers. For instance, spending more on recurrent expenditures brings about inflation due to the increased cost of living. However on the other hand more government spending may positively help in increasing demand and consumption among citizens hence bringing about faster recovery and increased production (Oladele, 2017). Government spending comes from tax collection and government borrowing. Both direct and indirect taxes are crucial ways through which government acquires its money and also through borrowing from local and foreign countries. Through public spending, a government is able to generate goods and services which are essential in fulfilling the economic and social objectives of the society and its people (Enanche, 2021)Government Spending Assignment Discussion. The government uses most of its revenues for domestic taxes including taxes on property, income and profits taxes, international trade taxes, and foreign transactions among others. There are tax collection agencies that are mandated to collect revenues for the federal government both at the national and local levels.

References

Enanche Christina. (2021). Sources of Government Revenue in the OECD. https://files.taxfoundation.org/20210210172143/Sources-of-Government-Revenue-in-the-OECD-2021.pdf

Oladele, M.F. & Mah, Gisele & Mongale, Itumeleng. (2017). The role of government spending on economic growth in a developing country. Risk Governance and Control: Financial Markets & Institutions. 7. 10.22495/rgcv7i2c1p2. Government Spending Assignment Discussion