Tuesday, January 22, 2013

Government Spending

Spending in American politics has been profoundly debated over and over again continuously by members of the two political parties, by educational institutions, and by the general public and to this day no credible consensus has been reached to allow for permanent settlement not only for the present but for posterity. Because of the changing dynamics of political leadership, economic mishaps and miscalculations, economic instability, and global economic distress, American spending is never guaranteed as changes can occur at anytime.
The politics of spending has created differing views and ideas in government and in civil society such that two opposing forces have emerged: advocates who are for spending and those who are against it. Such disagreements have led to political entanglements that run for a period of time until a delicate solution that does not hold for long is reached. An example of political differences in spending is the current fiscal cliff talks between the two political parties, Republican and Democratic.
There are those advocates who are opposed to more spending on education, social welfare, defense, and many other sectors of government. On the other hand, there are the advocates who believe in increased spending because they are of the opinion that society will benefit and the economy will be boosted. There are those advocates who are against spending on social welfare programs such as Food Stamps. They feel such spending will benefit free riders who enjoy the fruits labored by others. A free rider is someone who enjoys the benefits of a public good without contributing anything in return (Hyman, 2011).  However, it benefits a section of society who may be feeble, unemployed, and helpless. When public good is voluntarily contributed it equals the marginal benefit of the public good. Those opposed to more spending feel government is less concerned with market equilibrium and that government overspending damages or alters economic stability. Advocates of spending believe for public goods to be effectively delivered, compulsory payments must be financed by communities. Financing of public goods, as advocates of spending believe, has to be generated from taxation or through other sources of revenue.
Hyman, D.N. (2011). Public finance: A contemporary application of theory to policy (10th ed.). Thousand Oaks, CA: Sage Publications, Inc.

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