Where does government spending go Essay Example | Topics and Well Written Essays - 1000 words

Where does government spending go - Essay Example It is also important to note that often the overall expenditure made by the government on its purchase of goods and services exceeds the revenue generated by the government through taxes. As such government tend to borrow either from the international or domestic market in order to fill short fall or deficit arising in its budget. US government spent its revenues on major goods and services which it renders including the defense services, infrastructure development, salaries of the government employees as well as other heads under which the overall revenue or budget of the country is spent. Almost 54% of the revenue earned by the government is spent on the military related activities whereas 46% of the revenue is spent on the non-military related expenditure. The recent surge in the military related expenditure has mostly been associated with the new military activities conducted by US government in Afghanistan and Iraq. The current budget proposed by the Obama administration show a complete breakdown of how the overall budget will be spent on different activities of the government. The government has also proposed different budget cuts in order to improve the situation of its finances. (Harris). The overall public debt in US still more than $14.2trillion dollars suggesting that the government may be borrowing heavily in order to finance its activities. This paper will trace as to where the government money is spent and why US faces such huge debt of $14.2 trillions. How government money is spent? The recent budget proposed by the Obama administration shows how the government money will be spent under different heads1. A critical analysis of the data would suggest following: National Defense 2011 proposed budget is $3.69 trillions out of which $738 billions will be spent on the national defense which is mostly related with the military related expenditure. The money spent on the national defense however, is further broke down into different sub-headings such as operations and maintenance, military personnel, procurement, research and development, military construction, energy as well as family housing and other benefits to the military personnel. This composition of the spending suggests that most of the spending on the national defense is made in terms of operations and maintenance. Social Security The second largest chunk on which government money is spent is social security services provided by the government. Under social security, most of the money is spent on the old age and survivors insurance whereas the rest of the money is spent on the disability insurance. Income Security Another important source where most of the money is spent by the government is providing income security to the citizens. Under this head, money is spent on the unemployment insurance, food stamps, child tax credit, supplemental security income, military retirement, unemployment insurance, rental income support, child nutrition and various other heads. Income security therefore serves as an income stabilizing factor for the citizens with the help of government. Health and Education Another important source on which the government spends money is health and education sector under which State offer both these basic services. Under the health and education, government offers grants to the States for health facilities as well as the health services are offered to the retired employees, funding to National Institute of Health, children health insurance program as well as other expenditure is made. Under the head of education, government offers assistance in terms of student scholarships, support for the disadvantaged, elementary and vocational training, training and employment services as well as other services which are offered by the governmen