Presentation on theme: "1 Public Finance Public finance is the field of economics that studies government activities and the alternative means of financing government expenditures."— Presentation transcript:
1 Public Finance Public finance is the field of economics that studies government activities and the alternative means of financing government expenditures.
2 Government Governments are organizations formed to exercise authority over the actions of persons who live together in a society and to provide and finance essential services.
3 Political Institutions Political Institutions are rules and generally accepted procedures that evolve for determining what government does and how government outlays are financed.
4 Government Expenditures in the United States Government purchases of labor land capital Government Transfer Payments Welfare Social Security
5 Growth in Government Expenditures Table 1.1 (abbreviated) YearGDPFederal Government State and Local Government Total Government Percentage of GDP Total 193091.32.57.510.010.95 1945223.084.78.593.241.79 1960527.485.834.1119.922.73 19751635.2345.4152.1497.530.42 200210442.12073.91050.93124.829.93
6 International Comparisons Country Government Current Expenditures as a Percentage of GDP 2001 Denmark49.1 France48.8 Germany45.1 United Kingdom39.4 Japan38.1 Canada36.7 United States31.9
7 Figure 1.3 Total Government Expenditure as a Percentage of GDP 1929-2002
8 Figure 1.4 The Distribution of Federal Expenditure, 1966-2002
11 State and Local Expenditures (millions) CombinedStateLocal Capital226,78384,765142,017 Education594,590162,054432,536 Public Welfare279,597239,90339,694 Highways115,46771,24844,219 Utility138,78320,278118,504 Public Safety156,77955,682104,442
14 State and Local Revenue (millions) CombinedStateLocal Intergovernmental360,534335,422398,497 Taxes904,961535,241369,720 Property Tax279,1119,702269,409 Sales324,039262,36061,679 Income Tax202,858185,69617,161 Education72,40155,16617,235 Utility102,33811,93590,402