Hey, Big Spender! The Federal Budget: Introduction

Introduction

The title—Hey, Big Spender!—is meant to be somewhat ironic. Americans tend to distrust government in general and big government in particular. But, as I've noted, the U.S. government plays a smaller role in the U.S. economy than the governments of most developed nations play in theirs. U.S. taxes are lower, and public programs are smaller.

Still the government's role in the economy is one area where politics can be expected to intrude on economics, and it does. In this section, I will try to keep politics at bay and describe the role of the government, the money involved, where it comes from, where it goes, and the government agencies that most affect the economy. In other words, in this section our goal is to understand the government as the “G” in the C + I + G formula for GDP. The next section deals with economic policy.