One of the most important tools in the operations of any system whether it is a government, an organization or even an institution is the flow of money and other related issues. The US federal government and the state governments all have a big mandate and legal jurisdiction when money matters come into consideration. The operations of the governments are enhanced by availability of funds or lack of them thereof.
There are different aspects that relate to the monetary system including taxes, debts and other finances for both the federal and state governments. At the federal level, there is the Federal Reserve, usually abbreviated as the Fed. It is the central banking system of the United States that was created by an Act of Parliament in 1913 (Evans & Kenward, 1988). It mandated to supervise and regulate banks, as well as maintain the stability of the financial system. The Fed also provides financial services to depository institutions.
Free market dictates that that forces of demand and supply sets the prices of goods and services without government intervention (Evans & Kenward, 1988). On that note, America has always described its economy as a free market economy. However, this has been argued differently in different quarters and the economy accused of being not as free as it ought to be. The ideology of a free market economy is accused of condoning the vices of socialism and interventionism and leaving many in poverty, thus showing no freedom.
The United States is in debt, and thus its people are in debt. The debt has accumulated to the excess of 18.5 trillion dollars (Patton, 2015). The government has turned heavily to borrowing so as to get things right with regard to budget deficits. There are programs that have heavily taken up the debt proportion such as Medicare and Medicaid in the health sector. Others include the Social security program, and defense budget expenses among many others.
The US tax system is by all definitions complex. There are taxes at both levels of government. The taxing system is progressive, where you pay more if you earn more (Evans & Kenward, 1988). Critics of the system argue that the system is discriminatory in the sense that it places more burdens on low income earners. The system is also said to penalize people more for their hard work. I would go for the flat system of taxing if I were to choose. The system taxes everyone equally regardless of their income and thus can be considerate and less punitive.
It is hard to alienate people and kick them out when sharing the benefits of taxes that they have evaded paying or deliberately avoided. There should be a mechanism put in place to ensure that those who do not pay taxes do not benefit from them. But after all, there are some people who fail to pay taxes because they have nothing to pay from like the elderly. An exclusion principle may thus not work.
Everyone is entitled to keep the money he or she earns. This does not however exempt anyone from rendering what the government needs to the government. The balance that remains after all taxes have been slashed is the legal entitlement of an individual. For an employed person, it is after the income tax is slashed, for a business person, it is after surrendering the levies to the governments.
The federal government, state government and the counties spend taxpayers’ money on different aspects. The table here below indicates some of the ways through which the different levels spend the money remitted to them. The local and the state governments have almost similar expenditures, spending on the same function, thus they are listed together in the table, with the federal government on its own.
|Item||Local and State||Federal|
|2||Public welfare||Food and Agriculture|
|6||Debt’s interest||International Affairs|
|7||Fire protection||Science and research|
|8||Utilities and liquor stores||Veterans’ benefits|
There is little overlap between the federal government and the states. However, the overlap between the state and local government in the counties is incredible.
Everyone aspires to have a good employment and good salary after schooling. However, budgeting for what we get has always been a problem. On employment, an entry-level pay of $40000 per year would do. The biggest challenge is how to budget for the cash. The breakdown below shows how I plan to use my money on employment.
Total Income = $40000
Expenditure breakdown and savings
Item Amount ($)
Utility Bills (gas, internet, water, electricity) 4000
Car loan 2000
Car Insurance 3000
Health insurance 1500
State and federal Taxes 6000
Miscellaneous Expenses 1000
The expenditure of the governments shows a discrepancy with the government’s income. This explains why the country is in such a huge debt, almost five times the national budget. There should be a plan devised to control the spiraling debt figures before they get out of hand. Other than tax and debt, the government should increase its money sourcing to keep the economy growing and in operation.
Evans, O., & Kenward, L. Macroeconomic Effectsof Tax Reform in the United States. Staff Papers – International Monetary Fund 35.1 (1988): 141.
Patton, M. Forbes Welcome. Forbes.com. 2015. Web. 1 December 2015, from http://www.forbes.com/forbes/welcome/
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