Government spending

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Government spending or government consumption, abbreviated in economics regularly with the expenditure of the authorities of the State for goods and services. Alternatively, the Federal Republic of Germany government expenditures are defined as monetary expenditure at the level of the federal, state and local governments in a financial year.

Classification

Government expenditure consists of all expenditure across local authorities ( in Germany include: federal and state governments and municipalities and associations of municipalities ). Under net public spending to offset each other recorded financial liabilities of the individual authorities is understood. In a broader sense include government spending also all expenses incurred by the public sector. In addition to the expenditures for local government also includes expenditure of social security.

Government spending in the strict sense are against government revenues or public revenue. Her biggest share is taken by taxes, including but they also include charges such as fees, contributions or allocations of other authorities or taking out loans. The revenues are not earmarked in the state's activity, but are not limited to the coverage of government spending. The balance of income over expenditure of the State is the savings of the state. This is in most industrialized nations, negative ( eg in Germany since 1970 ), that is the state into debt. So the balance of the Federal Republic of Germany in 2006 was, for example, at 24 billion euros, which had a net borrowing of the same amount to a row. However, a number of states also has balanced budgets.

Breakdown of government spending

Functional principle

Government spending can be classified according to various characteristics, traditional classification by the Ministerialprinzip and the functional principle is made.

The Ministerialprinzip divided the expenditure by administrative areas in which government expenditures are made. In addition to the issues to be considered on subject areas that belong together and summarized under the term of the functional principle.

There are a number of individual tasks that must be fulfilled by different administrative areas and made ​​for the expenditure. These are grouped according to the functional principle throughout related subject areas. A comprehensive listing of state individual tasks can be found in the Federal Statistical Office.

Examples of summary subject areas are:

• Political leadership and central administrative expenditure
• Foreign Affairs
• Defense
• Public and social order and safety
• Legal
• Education
• Science and research outside the universities
• Cultural Affairs
• Health, Sports and Recreation
• Housing and Urban
• Economic Development
• Transport and communications
• Local community services

Subjects Cross expenditure form here, for example the general land and capital assets and financial allocations, interest or aid. A precisely itemized view of government spending in Germany can be seen in the financial report of the Federal Ministry of Finance ( see Related links ).

National Accounts

In the national accounts, a different allocation of government expenditure is made. In addition, social insurance to be added to the state sector here with the authorities. They are divided into the following four categories:

A further allocation is made in ordinary and extraordinary expenses. Ordinary expenditure to be financed by tax revenues, while personal debt for extraordinary expenses of the State.

Government spending in Germany

Public spending ( government spending included with the social security funds) amounted in Germany, according to calculations by the Federal Statistical Office in 2012 estimated 45.2 % of GDP (GDP = 2.644 billion euros ), revenues from taxes, duties and contributions 44.3 % of GDP ( Member States of the European Union average: 49.4 %). The social rate (including health system, family, unemployment insurance) in 2006 was around 30.3% of GDP. The tendency of the relative expenditure and revenue (including social security ) is decreasing. The revenue and expenditure of the central government amounted to 2007 696 or 703 billion euros.

The real ( inflation-adjusted ) government spending in Germany have fallen compared with 1991 in the areas of environmental, recreational, sports and culture. Although education spending initially increased and stagnated since 1996, in the area of ​​public order and security are spending compared to 1991 increased in real terms significantly and remained static since 2002.

Government spending in the economy

State expenditures do in the area of fiscal policy is an important instrument of the state to influence the economy and the economy dar.

For example, one starts from the fiscalism (demand -oriented fiscal policies ), then the payment of subsidies to companies described as such a measure. With the help of subsidies from the state companies have the ability to invest for example in new production units and research and development. As a result, more products, and possibly at lower prices, offer, whereby the consumption of customers grows the company. Thus, companies generate more sales and increase profits. Higher profits companies have to pay more taxes and it ultimately benefited the state in the form of increasing government revenue.

As a counterpart of the fiscalism monetarism is (supply- oriented monetary policy), which is not busy as the fiscalism with the increase in demand, but with the increase of the offer.

Use of government spending in calculations

According to Government spending serve their height and structure as an indicator of the extent of state activity. For example, the government's share is calculated by the share of government expenditure to gross domestic product.

Where: GDP - gross domestic product - consumption of the state - government investment, S - expenditure on social transfers and subsidies, Z - Interest expenses, G - government spending

In the subject area of the freight market government spending in the calculations are also taken into account, as for example in the demand for goods:

Where: N - demand for goods, C - private consumption, I - private investment, G - government spending, X - Exports, IN - Imports