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Government budgets have economic, political and technical basis. Unlike a pure economic budget, they are not entirely designed to allocate scarce resources for the best economic use. Government budgets also have a political basis wherein different interests push and pull in an attempt to obtain benefits and avoid burdens.
Also called budget deficit or simply deficit. The amount by which spending exceeds revenue over a particular period of time; it is the opposite of budget surplus. The term may be applied to the budget of a government, private company, or individual. deflation A decrease in the general price level of goods and services. [111]
In economics, a federal budget is the major plan for a federal government's estimated future revenues and spending for the coming fiscal year. [1] The federal budget is representation of the financial plan for the goals and activities of the government which in turn reflects the debates surrounding the various economical principles and ideas.
The concept of a fiscal straitjacket is a general economic principle that suggests strict constraints on government spending and public sector borrowing, to limit or regulate the budget deficit over a time period. Most US states have balanced budget rules that prevent them from running a deficit.
Government spending or expenditure includes all government consumption, investment, and transfer payments. [1] [2] In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or collective needs of the community, is classed as government final consumption expenditure.
The US government's Bureau of Economic Analysis as of Q3 2023 estimates $10,007.7 billion in annual total government expenditure and $27,610.1 billion annual total GDP which is 36.2%. [1] This government total excludes spending by "government enterprises" which sell goods and services "to households and businesses in a market transaction."
The CBO publishes The Budget and Economic Outlook in January, which covers a ten-year window and is typically updated in August. It also publishes a Long-Term Budget Outlook in July and a Monthly Budget Review. The OMB, which is responsible for organizing the President's budget presented in February, typically issues a budget update in July.
The size of the government budget deficit tends to increase when a country enters a recession, which tends to keep national income higher by maintaining aggregate demand. There may also be a multiplier effect .