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Economics on the Net:

Putting Tax Dollars to Work

In this application, you will learn about how the U.S. government allocates its expenditures. This will enable you to conduct an evaluation of the current functions of the federal government.

Title: Historical Tables: Budget of the United States Government

Navigation: Go to http://www.gpoaccess.gov/usbudget/index.html to visit the home page of the U.S. Government Printing Office. Select the most recent budget available, and then click on Historical Tables.

Application: After the document downloads, examine Section 3, Federal Government Outlays by Function, and in particular Table 3.1, Outlays by Superfunction and Function. Then answer the following questions:

  1. What government functions have been capturing growing shares of government spending in recent years? Which of these do you believe to be related to the problem of addressing externalities, providing public goods, or dealing with other market failures? Which appear to be related to political functions instead of economic functions?

  2. Which government functions are receiving declining shares of total spending? Are any of these related to the problem of addressing externalities, providing public goods, or dealing with other market failures? Are any related to political functions instead of economic functions?





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