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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
"We don't really have a democracy yet," Nick Nyhart, founding executive of voting rights advocacy group Every Voice, which committed funds to the Seattle public financing campaign in 2015, told IBT.
Beginning with the development of the fiscal system of the Dutch Republic, she discusses financing the first phase of the revolt against Spain 1566-72, from under-taxed part of an empire to a heavily taxed republic 1550s to 1609, and public financing of the Dutch Republic in the 17th and 18th centuries.
Washington, Muharram 17, 1435, Nov 20, 2013, SPA -- The White House said Wednesday that it is "delighted" the United Kingdom joined the United States in shifting public financing toward cleaner energy sources.
There is a consensus that the presidential public financing program is antiquated and offers insufficient benefits to attract the most competitive candidates.
Just as it voted to repeal health care reform without first holding hearings, the new Republican majority in the House is rushing to repeal the system of public financing of presidential campaigns.
Barack Obama, the US Democratic presidential candidate, has said he will not accept public financing for his election campaign.The move means Obama's campaign will miss out on more than $80 million in public money he could have accessed.
President Carter, President Reagan, President Clinton and both Presidents Bush each participated in the public financing system during their general election campaigns, and used it to win the presidency.
Such a system of public financing has been the brass ring for reformers for three decades.
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.
Justice Minister Juan Fernando Lopez Aguilar told a Spanish newspaper that the government, headed by Prime Minister Jose Luis Rodriguez Zapatero, would renegotiate a deal the government signed with the Vatican in 1979 assuring public financing of the church, Agence France-Presse reported in late May.
Follow-up interviews revealed that the protest was ignited by a successful HBA lobbying campaign to defeat a measure that would have allowed public financing of local elections.

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