Types Of Government Spending

Have you ever made a budget at home? If yes, you probably decide to categorize how you spend your money and plan to spend a certain amount on your clothes, your membership fee, groceries and such like and the types of government spending is more or less the same- every government spends different amounts of money on different sections just as you do when you make your monthly or annual budget though, the government has a whole lot more to plan! There are two types of government spending- the first one being discretionary and the second of the two types of government spending being mandatory.

The discretionary spending is what the government decides to spend on their intelligence agencies, armed forces and other such departments. These guys help run the country in a particular way. In the US the Congress determines how much is to be spent on these bodies and groups. Take the example of the war that the Obama administration wishes to fight against Syria- because the Congress has not agreed to fund it, the government cannot and will not spend money on the war in Syria.

Then there are those types of government spending that are mandatory and these are known as mandatory because there are actual laws that ensure that a certain amount of the budget would be spend on these aspects and departments of the government. Social services, funds spent on benefits for the disabled, the bank, etc. are all examples of the types of government spending that are determined by the people of a country, not any other body. This is because the more the people that need such funds, the more the government would have to increase the expenditure and allot funds to these departments and spend on these people as well.

Then there are some countries where there’s a federal government and a central government. The central government has control over those types of government spending that has more to do with the defense budget, the national bank, the armed forces and such like. Where the federal government is concerned, these guys spend on the departments and ministries within their own domain and region. They do not have control over the banking policies, interest rates, money spent on the armed forces or anything that is handled or funded by the central government.

These are just examples of some of the many types of government spending though there are primarily two types of government spending that have been mentioned here. These types of government spending can be found in other countries too though they are not always controlled by a body (like the Congress in the US which does control these types of government spending) and that is why corruption in such countries is widespread. The money that citizens give in taxes are usually spent on them by the government- these funds are spent on electricity, education, social benefits and such like (though there are governments that use these types of government spending for corruption purposes as well).