Public Finance

Government expenditures and receipts make up the public finance arena. Transfer payments, like health insurance programs and social security, represent an overwhelming percentage of the spending done by the U.S. government.

Expenditures also include defense spending, education, infrastructure, appropriations, foreign relief aid, and research spending.

Tax receipts, tariffs, and other sources of income represent inflows of central governments. Tax rates (Staggered, flat, etc) are determined by governments and can have significant impacts on economic activity and production.

Increased government spending can serve to boost economic activity and enhance programs designed to increase social benefit. Yet higher fiscal spending also serves to raise borrowing costs and can spark dramatic inflation.

Public Finance - Article By Better Trades