public finance

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public finance

the branch of economics concerned with the income and expenditure of public authorities and its effect upon the economy in general. When the CLASSICAL ECONOMISTS wrote upon the subject of public finance, they concentrated upon the income side, TAXATION. Since the Keynesian era of the 1930s, much more emphasis has been given to the expenditure side and the effect that FISCAL POLICY has on the economy.

The PUBLIC SECTOR is so large a part of most economies that it influences virtually every aspect of economic life, either through its own expenditure on goods and service provided by the private sector, its wage payments to public-sector employees, or its social security payments (pensions, sickness and unemployment benefits). Similarly, the financing of these expenditures by means of various taxes (income tax, value-added tax, corporation tax, etc.) affects the size and pattern of spending by individuals and businesses.

Governments plan their revenue and expenditure each fiscal year by preparing a budget (see BUDGET ( GOVERNMENT)). They may plan to match their expenditure with their revenue, aiming for a BALANCED BUDGET; or they may plan to spend less than they raise in taxation, running a BUDGET SURPLUS and using this surplus to repay former public debts (see NATIONAL DEBT); or they may plan to spend more than they raise in taxation, running a BUDGET DEFICIT that has to be financed by borrowing (see PUBLIC-SECTOR BORROWING REQUIREMENT).

As well as serving as the instrument of government planning of its own economic and social commitments, the budget plays an integral role in the application of fiscal policy, specifically the operation of DEMAND MANAGEMENT policies to reduce unemployment and inflation. See KEYNESIAN ECONOMICS, PROGRESSIVE TAXATION.

References in periodicals archive ?
Of the many strategies and reforms to emerge from that period, public financing of electoral campaigns became one of the most widely discussed and viable options that state and local jurisdictions could adopt.
For starters, public financing can work only if there's no private financing for campaigns, including independent expenditures -- spending on a candidate's behalf, but not through his or her official campaign.
If there were ever a time to push hard for passage of Clean Elections, the public financing of elections, it is now.
Reformers have long wanted to take the next logical step and employ public financing not just in presidential contests but in House and Senate races, too.
A three-year legal challenge on free speech grounds by the National Right to Life Committee and the ACLU just failed, and 115 candidates for state office will take advantage of full public financing this fall.
The best way to implement comprehensive reform would be to offer full public financing of all congressional campaigns.
Maine's proposal would also include an optional "clean elections option," providing public financing for candidates who agree to abide by a set of spending limits and a shortened campaign season.
Founded in 1889 in Cincinnati, OH, Peck, Shaffer & Williams LLP focuses on providing legal counsel for the broadest range of public financing transactions, including both tax-exempt and taxable financings.
Crucial bipartisan presidential public financing legislation recently introduced by Reps.
Los Angeles is considering full public financing of elections, part of a growing civic trend to stem the influence political donors have on City Hall.
For instance, how would public financing of campaigns halt the monopoly held by the two major political parties?
Contra Costa County Public Financing Authority (CA) (Multiple Project Areas) tax allocation revenue bonds series 2003A;

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