Question

5. Using the historical tables from the Budget of the US government, determine where the US government allocates its expenditures.

. A. Examine Table 3.1 on Outlays by Superfunction and Function. Consider what government functions have been capturing growing shares or declining shares of government spending in recent years.

B. Select one of the government functions and describe in a brief summary whether it has seen an increase or decrease in government spending over the past 10 to 15 years. For the function you have selected, is it related to the problem of addressing externalities, providing public goods or dealing with other market failures. Does it appear to be related to political functions instead of economic functions?

Answer 1

Social Security, Unemployment, Labor, Medicare & Health are the major areas where the US government allocates its expenditure. Social security covers 23% of the total Federal budget and additional 23% comprises of Medicare and Health.

Due to growing concerns of the government towards better medical facilities and healthcare, there is a growing share of government spending in medicare and social security in the recent years.

Medicare is towards providing public goods and social facilities to the population.