Public finance is the study of the role of the government in the economy.[1] It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.[2] The purview of public finance is considered to be threefold, consisting of governmental effects on:[3]
==Overview==One of the more traditional subfields of economics, public finance emphasizes the function and role of government in the economy. A region's inhabitants established a formal or informal entity known as the government to carry out a variety of tasks, including providing for social requirements like education and healthcare as well as protecting the populace's private property from outside threats.
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The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good (the moment that good was produced and sold, it starts to give its utility to every one for free) at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defense is one example of non-rival consumption, or of a public good.[9]
Government can pay for spending by borrowing (for example, with government bonds), although borrowing is a method of distributing tax burdens through time rather than a replacement for taxes. A deficit is the difference between government spending and revenues. The accumulation of deficits over time is the total public debt. Deficit finance allows governments to smooth tax burdens over time and gives governments an important fiscal policy tool. Deficits can also narrow the options of successor governments. There is also a difference between public and private finance, in public finance the source of income is indirect, e.g., various taxes (specific taxes, value added taxes), but in private finance sources of income is direct.[11]
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[14] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives, i.e., as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern government is thus needed not merely to raise the revenue required to meet its expenditure on administration and social services, but also to reduce the inequalities of income and wealth. Taxation might also be needed to draw away money that would otherwise go into consumption and cause inflation to rise.[15]
Macroeconomic data to support public finance economics are generally referred to as fiscal or government finance statistics (GFS). The Government Finance Statistics Manual 2001 (GFSM 2001) is the internationally accepted methodology for compiling fiscal data. It is consistent with regionally accepted methodologies such as the European System of Accounts 1995 and consistent with the methodology of the System of National Accounts (SNA1993) and broadly in line with its most recent update, the SNA2008.
The GFSM 2001 addresses the institutional complexity of government by defining various levels of government. The main focus of the GFSM 2001 is the general government sector defined as the group of entities capable of implementing public policy through the provision of primarily non market goods and services and the redistribution of income and wealth, with both activities supported mainly by compulsory levies on other sectors. The GFSM 2001 disaggregates the general government into subsectors: central government, state government, and local government (See Figure 1). The concept of general government does not include public corporations. The general government plus the public corporations comprise the public sector (See Figure 2).
The GFSM 2001 recommends standard tables including standard fiscal indicators that meet a broad group of users including policy makers, researchers, and investors in sovereign debt.Government finance statistics should offer data for topics such as the fiscal architecture, the measurement of the efficiency and effectiveness of government expenditures, the economics of taxation, and the structure of public financing. The GFSM 2001 provides a blueprint for the compilation, recording, and presentation of revenues, expenditures, stocks of assets, and stocks of liabilities. The GFSM 2001 also defines some indicators of effectiveness in government's expenditures, for example the compensation of employees as a percentage of expense. The GFSM 2001 includes a functional classification of expense as defined by the Classification of Functions of Government (COFOG) .
To reduce the mortality and morbidity associated with preterm births, policymakers should make screening available to the full extent of current evidence-based guidelines and provide public funding to increase access to treatment through outreach, care coordination, and other supports. In all cases, health care providers should inform parents of this screening option as appropriate; work with patients to obtain informed consent; and then determine an appropriate course of action. If a woman is found to be at increased risk of preterm birth, either through a questionnaire or a cervical screening, doctors and other health care providers should ensure they help parents understand their treatment options and develop a plan to reduce their risk.
Policymakers need to take a multipronged approach to address barriers to accessing care, which in many cases are interconnected. In the short term, policymakers should focus on encouraging existing mental health providers to participate in greater numbers in Medicaid as well as in other public and private insurances sources so that patients can access a greater breadth and quality of care and associated benefits. Higher Medicaid payment rates will encourage more behavioral health providers to participate in the program. Second, to help offset these costs for states, federal policymakers should increase the federal share of Medicaid payments for mental health care services. Higher payment rates are a critical first step in ensuring that all women enrolled in Medicaid can access vital benefits such as screenings for depression for pregnant and postpartum women.240 Additionally, public and private health insurers should consider covering nontraditional, alternative behavioral health therapies such as meditation or art therapy, which promote good mental health and patient choice in treatment options.
As noted earlier, U.S. immigration policy and the criminal justice system target women of color. This can be seen in recently implemented draconian policy changes and attacks on immigrant communities454 as well as the persistent criminalization of black and brown women for minor offenses. As a consequence, there is an overrepresentation of these populations within both ICE detention centers and in prisons and jails across the country. Addressing the practice of shackling and the criminalization of women of color are key to broader criminal justice reform efforts. Policymakers should issue a total ban on shackling of incarcerated pregnant women in both public and private prisons as well as those in ICE custody.455
Cristina Novoa is a senior policy analyst for Early Childhood at the Center for American Progress, where she uses her training in developmental psychology and public policy to advance policies that benefit young children. Most recently, she worked as a researcher on a range of early childhood issues at SRI International. Prior to joining American Progress, she completed fellowships at the National Academies of Sciences, Engineering, and Medicine and in the office of Sen. Kirsten E. Gillibrand (D-NY).
No, not as divided. I would say that if you surveyed the economics profession they would be much more uniform than the polity about the need for a broad tax base, which means no mortgage deduction and no health insurance exemption. If you surveyed public finance economists they would advocate moving away from income taxation toward consumption taxation because of the belief that that would encourage savings.
The more intriguing questions arise from the more nuanced opportunities that arise from the new coverage and regulatory environment in which public health policy-making and practice will take place. For example, how will public health's role in prevention be affected by expanded coverage of clinical preventive services in public and private insurance? Should public health become more involved in the direct provision of certain types of clinical preventive care to assure that access is realized? How will Medicaid agencies and state Exchanges find the supply of health professionals needed to expand existing sources of care? How might public health agencies work with health professions training and residency programs in their states to begin to plan for the vast increase in demand for care? How might public health agencies work directly with employers, insurers, and health-care providers on ways to translate coverage reforms into actual improvements in health-care services? 2ff7e9595c
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