Académique Documents
Professionnel Documents
Culture Documents
ION Chapter 1
1-3
Government at a Glance:
The Legal Framework
Federal Government: Constitutional
Provisions
Article 1, Section 8
Congress will pay the Debts and provide for the common Defense
and general Welfare of the United States.
The Congress shall have Power to lay and collect Taxes, Duties,
Imposts and Excises.
Article 1, Section 9
Nodirect Tax shall be laid, unless in Proportion to the Census or
Enumeration herein before directed to be taken.
16th Amendment
Congress shall have power to levy and collect taxes
5th Amendment
No person shall bedeprived of life, liberty, or property, without
due process of law
1-4
Government at a Glance:
The Legal Framework
State Governments
Federal Constitution gives state governments
board autonomy to spend and tax.
Federal Constitution 10th Amendment controls
states international economic policy.
States Constitutions vary in spending and taxing
restrictions and the economic issues with which
they deal.
Local Governments
Derive power to tax and spend from the States.
Fiscal independence of local governments.
1-5
Government at a Glance:
The Size of Government
How to measure the extent to which societys
resources are subject to control by government.
Annual expenditures
Types of government expenditure
Purchases of goods and services
Transfers of income
Interest payments
Budget documents
Unified budget: Itemized list of federal government revenues
and expenditures.
Regulatory budget: Economic costs of government regulations.
1-6
Total
2011 Dollars
Expenditur
(billions)*
es (billions)
Relativefor
to
Adjusting
Economy
Population
2011
Dollars per
capita
Percent of
GDP
1970
295
1,375
6,703
28.4%
1980
847
2,007
8,815
30.4%
1990
1,880
2,948
11,784
32.4%
2000
2,906
3,712
13,155
29.2%
2011
5,410
5,410
17,362
35.9%
United
States
Chapter 1 Summary
Public Finance/Public Sector Economics focuses on
governments role in the allocation of real
resources - that includes, but is not limited to, taxing
and govt spending.
The Mechanistic view vs. Organic view of government.
The U.S. embraces the mechanistic view, which nevertheless
leads to disagreements on the appropriate size of the
government.
Evidence shows that the impact of the U.S. government on
the allocation of national resources has increased over time.
Appendix:
Doing Research in Public
Finance
General-interest journals
1-13
1-14