Government spending

In the 20th century, John Maynard Keynes argued that the role of public expenditure was pivotal in determining levels of income and distribution in the economy.

Currency-users at all levels (national, regional and local) need to raise revenue from a variety of sources to finance public-sector expenditures.

[13] John Maynard Keynes was one of the first economists to advocate for government deficit spending as part of the fiscal policy response to an economic contraction.

In this theory, if the government increases deficit spending, it will borrow money from the private capital market and reduce the supply of savings to S2.

[24] Factors of recent defense spending increases include Russian invasion of Ukraine and related deteriorating security situation.

Crowding 'in' also[28] happens in university life science research Subsidies, funding and government business or projects like this are often justified on the basis of their positive return on investment.

In the US the total investment in medical and health research and development (R&D) in the US had grown by 27% over the five years from 2013 to 2017, and it is led by industry and the federal government.

Even more, fast economic growth which is generally associated with the higher government revenues and health spending is mostly located in Asia such as China, India and Indonesia followed by the Middle East and Latin America.

In these countries, the real health spending per capita grew by 2.2 times and increased by 0.6 percentage point as per a share of GDP from 2000 to 2017.

Spending on physical infrastructure in the U.S. returns an average of about $1.92 for each $1.00 spent on nonresidential construction because it is almost always less expensive to maintain than repair or replace once it has become unusable.

[33] Likewise, government spending on social infrastructure, such as preventative health care, can save several hundreds of billions of dollars per year in the U.S., because for example cancer patients are more likely to be diagnosed at Stage I where curative treatment is typically a few outpatient visits, instead of at Stage III or later in an emergency room where treatment can involve years of hospitalization and is often terminal.

Other large economy country spending figures include South Korea ($4,557), Brazil ($2,813), Russia ($2,458), China ($1,010), and India ($226).

For example, the SNA counts the entire cost of running the public-university system, not just what legislators appropriate to supplement students' tuition payments.

[67][68][69] Public sector ethics may also concern government spending,[70][additional citation(s) needed] affecting the shares and intentions of government spending or their respective rationales (beyond ethical principles or implications of the contextual socioeconomic structures),[citation needed] as well as corruption or diversion of public funds.

[71] In 2012, following a United States presidential Campaign to Cut Waste, the Office of Management and Budget issued a memorandum to the heads of federal departments and agencies calling for the avoidance of wasteful expenditure, identifying "practical steps" and setting specific targets for reduction of expenditure on travel, conference attendance and expense, real property and fleet management.

Due to the World War I anticipation, the share increased quickly in Austria, France, United Kingdom or Germany.

In United Kingdom, Germany, Italy and France, which were affected a lot by the war, the share of public expenditure even exceeded 25 percent.

4) Wars and social crises – fighting among people and communities, and prolonged drought or unemployment, earthquake, hurricanes or tornadoes may lead to an increase in public expenditure of a country.

[73] Looking at how the world panorama has been developing in the last years and bearing in mind various factors such as economic conditions, government priorities, demographic changes, and technological advancements, these are some key trends that will probably shape public spending in the near future: As life expectancy increases all over the world, governments are expected to spend more on healthcare and pensions for elderly people.

This means the cost of universal digital connectivity and internet use, widespread access to banking and financing services is $1231 per capita.

Public spending is expected to rise in areas like sustainable urban development, renewable energy sources, and climate resilience projects.

For the first time since 2009, military spending increased across all five continents identified by SIPRI (Stockholm International Peace Research Institute), with significant rises observed in Europe, Asia, Oceania, and the Middle East.

With the rise in government spending due to various crises and long-term investments, managing public debt will become a critical issue.

According to the IMF (International Monetary Fund), without any additional reforms, government spending in emerging market economies can rise by between 3 and 6 percentage points of GDP until 2050.

In developed economies, where there is a greater need for consolidation and limited scope for generating extra revenue through taxes, spending reductions might be required as a component of a broader reform plan.

In contrast, in many emerging markets and low-income economies, a substantial portion of the population does not have access to comprehensive public services like education and healthcare.

These are tools that work as a collaborative effort to develop and implement policy choices by examining the government's current expenditures within specific areas.

Governments might increase investment in education, particularly in STEM fields (Science, Technology, Engineering, and Mathematics) and vocational training, to prepare the workforce for future job markets.

These 17 global goals, set by the General Assembly of the United Nations, cover social and economic development matters and are in the 2030 UN Agenda.

Through their targets and indicators, these goals set a critical guide for how governments can spend money and formulate policies to approach areas where they can really make a big positive impact.