The government focuses on various priorities each year before determining its expenditure agenda because it understands the impact of these choices on consumption in the nation. For instance, an increase in government spending leads to a decrease in investments (Blanchard and Perotti 2002). According to the author of this essay, the government needs to redirect its current level of spending to programs that increase access to resources and services. That will increase the level of efficiency and reduce costs, creating a vibrant economy. The first section reviews two reasons why government incurs expenditure and then later examines the dominant programs in the marketplace today.
Education and healthcare are the two dominant cost centers for Americans. The high taxation rate and stringent structures attest to that fact. Population growth, improvement in science, technology, and innovation has led to increased investment in defense and security. Taxpayers are also expected to support agriculture, environment and culture, foreign affairs and trade initiatives proposed by presidential administrations because the vacuum created in global leadership could result in unanticipated transformations in comprehensive policy. Changes are not always predicated on being favorable. Investment is therefore vital within the nation’s borders and outside the previously numerous ally countries supporting mutual interests.
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Promoting both forms of investment is ideal, with a focus on capital projects which promise returns in the form of employment, infrastructure development, and revenue generation. Meeting these basic needs is undoubtedly one yardstick measuring the extent of growth in the United States (Hicks & Streeten 1979). The U.S government is one of the most significant contributors to foreign aid in the developing world, specifically in sub-Saharan Africa where it supports governance initiatives (Bräutigam and Knack 2004). Although corruption disrupts this process in some nations, over-reliance on aid has reduced over the years (Moss et al. 2006). Government spending also focuses on paying civil servants, programs in capital-intensive activities in healthcare, agriculture, and public utilities through government budgets (Osborne 2003).
Healthcare takes up a relatively more significant portion of expenditure due to the human resource component associated with the service. The same can be said about education, which characteristically bears a higher staffing component. Nearly $2.0 trillion of the nation’s gross domestic product (GDP) is spent on health services (Stanton and Rutherford 2006). Most of these finances are directed to the treatment of expensive chronic conditions such as asthma, diabetes, and hypertension. More funding is required to support prisoners who are yet to receive better health services (Wilper et al. 2011).
For decades, economic sustenance and education have been directly correlated by experts. Schools in the US are yet to achieve their targets of quality when compared with nations such as Norway, Australia, Germany, and Finland (Schwab and Porter 2008). The return on each amount spent on education is not yet appreciated in comparison to the noticeable gains from military spending. Military assistance programs have acquired interest from the Senate and House of Representatives. Their role in sustaining the way of life in the country is a unifying factor with impending threat of terrorism (Szymanski 1973).
The government is in need of mechanisms that reduce overspending. A significant amount of spending has been attributed to unemployment, spending on retirement benefits and healthcare for those over 60 years old and 65 years old respectively through Medicare and Medicaid schemes (Burner and McKusick 1992). Government benefits programs should focus on identification of sources of revenue to support these innovative plans to alleviate urban poverty.
References
Burner, S. T., Waldo, D. R., & McKusick, D. R. (1992). National health expenditures projections through 2030. Health Care Financing Review , 14 (1), 1.
Blanchard, O., & Perotti, R. (2002). An empirical characterization of the dynamic effects of changes in government spending and taxes on output. the Quarterly Journal of economics, 117(4), 1329-1368.
Bräutigam, D. A., & Knack, S. (2004). Foreign aid, institutions, and governance in sub-Saharan Africa. Economic development and cultural change, 52(2), 255-285.
Hicks, N., & Streeten, P. (1979). Indicators of development: the search for a basic needs yardstick. World development, 7(6), 567-580.
Moss, T. J., Pettersson Gelander, G., & Van de Walle, N. (2006). An aid-institutions paradox? A review essay on aid dependency and state building in sub-Saharan Africa.
Osborne, D. (1993). Reinventing government. Public productivity & management Review, 349-356.
Schwab, K., & Porter, M. (2008). The global competitiveness report 2008–2009. World Economic Forum.
Stanton, M. W., & Rutherford, M. K. (2006). The high concentration of US health care expenditures (pp. 06-0060). Washington, DC: Agency for Healthcare Research and Quality.
Szymanski, A. (1973). Military spending and economic stagnation. American Journal of Sociology, 79(1), 1-14.
Wilper, A. P., Woolhandler, S., Boyd, J. W., Lasser, K. E., McCormick, D., Bor, D. H., & Himmelstein, D. U. (2009). The health and health care of US prisoners: results of a nationwide survey. American journal of public health, 99(4), 666-672.
