Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,1-,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,CHAPTER 1,Introduction,Copyright 2010 by the McGraw-Hill Companies,Inc.All rights reserved.,McGraw-Hill/Irwin,CHAPTER 1IntroductionCopyrig,Defining the Field of Study,Public Finance,the field of economics that analyzes government taxation and spending policies,Public Sector Economics,see definition above,Public Economics,see definition above,What is not part of public finance?,Defining the Field of StudyPu,Public Finance and Ideology,Organic view of government,Mechanistic view of government,Public Finance and IdeologyOrg,The Legal Framework,Federal government,Federal Constitutional provisions,Article 1,Section 8,Article 1,Section 9,16,th,Amendment,5,th,Amendment,The Legal FrameworkFederal gov,The Legal Framework,State governments,Federal constitutional provisions,10,th,amendment,The State constitutions,Local governments,Derive power to tax and spend from the States,Fiscal independence of local governments,The Legal FrameworkState gover,The Size of Government,How to measure the size of government,Number of workers,Annual expenditures,Types of government expenditure,Purchases of goods and services,Transfers of income,Interest payments,Budget documents,Unified budget,Regulatory budget,The Size of GovernmentHow to m,State,Local,and Federal Government Expenditures(selected years),1,2,3,4,Total Expenditures(billions),2008 Dollars(billions)*,2008 Dollars per capita,Percent of GDP,1960,123,714,3,950,23.3%,1970,295,1,308,6,379,28.4%,1980,843,1,905,8,367,30.2%,1990,1,873,2,804,11,210,32.2%,2000,2,887,3,527,12,487,29.4%,2008,4,723,4,723,15,488,33.1%,*Conversion to 2008 dollars done using the GDP deflatorSource:Calculations based on,Economic Report of the President,2009,pp.282,286,325,381.,Adjusting for Inflation,Adjusting for Population,Relative to Economy,State,Local,and Federal Gove,Government Expenditures as a Percentage of GDP(2008),United,States,Source:Organization for Economic Cooperation and Development 2008a.,Government Expenditures as a P,Composition of Federal Expenditures(1965 and 2008),Note decline in Defense,Note increase in Social Security,Medicare and Income Security,Source:,Economic Report of the President,2009,p.379.,Composition of Federal Expendi,Source:,Economic Report of the President 2009,p.389.,Composition of State&Local Expenditures(1965 and 2008),Increase in public welfare,Decline in highways,Source:Economic Report of the,Source:,Economic Report of the President,2009,p.379.,Composition of Federal Taxes(1965 and 2008),Social insurance and individual incometax have become more important,Corporate and othertaxes have become less important,Source:Economic Report of the,Source:,Economic Report of the President,2009,p.385.,Individual tax more important,Property tax less important,Composition of State And Local Taxes(1965 and 2005),Source:Economic Report of the,Changes in the Real Value of Debt,Inflation tax,Changes in the Real Value of D,Doing Research in Public Finance,Public Finance journals,International Tax and Public Finance,Journal of Public Economics,National Tax Journal,Public Finance,Public Finance Quarterly,General-interest journals,American Economic Review,Journal of Economic Perspectives,Journal of Political Economy,Quarterly Journal of Economics,Review of Economics and Statistics,Doing Research in Public Finan,Doing Research in Public Finance,Other sources,Journal of Economic Literature,Brookings Institutions,Studies of Government Finance,Congressional Budget Office reports,National Bureau of Economic Research working papers,Tax Foundations,Facts and Figures on Government Finance,U.S.Government Printing Office publications,Statistical Abstract of the United States,Economic Report of the President,Budget of the United States,U.S.Census of Governments,Historical Statistics of the United States from Colonial Times to 1970,Doing Research in Public Finan,Doing Research in Public Finance,Public Finance data available on Internet,Resources for Economists on the Internet,U.S.Census Bureau,University of Michigans Office of Tax Policy Research,Urban-Brookings Tax Policy Center,Doing Research in Public Finan,