The economic problem

      Public expenditures and financial systems have become very important in our modern era with regard to the global economy and economic activity. Every project needs expenditures and all funds need a financial system that depends on the wheel of the economy’s rotation. We must understand the characteristics of public expenditures and financial systems in order to deal with economic projects according to correct laws and rules. To be more understanding

Financial systems

The economic system consists of several economic quantities, the most important of which are the national product, national income, national spending, and the financial system consisting of several financial quantities, the most important of which are public expenditures and public revenues, and the financial activity is subject to the rules of economic analysis and with regard to the relationship between financial and economic quantities. Financial quantities are part of the economic quantities, and there are mutual relations between them. The relationship that binds the state’s financial system with its system is a reciprocal relationship, and with regard to the relationship between the financial system and the political system, the financial system reflects the trends of the political system and the general budget reflects the trends of government in the country and the financial system is considered a tool for achieving the goals of the political system and the social system. The relationship between the state’s financial system With its legislative laws, it is a clear and apparent relationship. The set of legal rules that regulate the financial affairs of the state and its institutions is called the financial legislation. It looks at the set of legal rules that regulate public interests and utilities. Administrative legislation. Financial legislation has links to all branches of law, but the most clear relationship is with constitutional law, administrative law and the sector. General It is similar to the private sector in achieving the maximum possible profit when it establishes projects of an economic nature.

The criterion for the success of the financial policy in the private activity is through the effect of the special financial quantities in solving the problems related to the private activity and the criterion for the success of the fiscal policy in the public activity is through the effect of the public financial quantities on the distribution of the national income, and with regard to the balance between expenditures and revenues in the private activity, this is done according to The rule of priority of revenues over expenditures and with regard to the balance between expenditures and revenues in public activity, this is done according to the rule of priority of expenditures over revenues, and with regard to revenues of private and public activity, the private sector often resorts to contracting authority to obtain its revenues, and from the restrictions of the state's use of taxes as a way to obtain its revenues is tax energy For the group and from the restrictions of the state resorting to the new monetary issuance as a way to obtain its revenues is full employment in developed countries and the rigidity of the productive structure in backward countries and from the restrictions of the state resorting to internal and external loans as a way to obtain its revenues is the state’s ability to repay loans and their burdens. You first estimate the revenues and then determine the ways in which those revenues will be spent The ratio to balance expenditures and revenues in general activity. Expenses are first estimated and then the revenues required to cover them are determined.

For any public expense there must be certain elements, including the form of alimony, the character of the person in charge of the spending, the purpose of spending, and regarding the form of public expenditure, it must be a cash amount. Among the reasons for taking public expenditures, the form of the cash amount, the economy’s transition from the stage of the barter economy to the stage of the cash economy, and the need for public spending to administrative control This is difficult when the alimony is in-kind and the difficulty in estimating the value of the public alimony when it is in-kind, and the introduction of public alimony in kind leads to a breach of the principle of equality between individuals in bearing the public burdens, and with regard to the status of the person in charge of public alimony, it must be a person with a public character.

Alimony is private if it is carried out by persons of private activity and in general if it is carried out by persons of public activity. This expression is an indication of the legal idea of ​​public expenditures. A distinction is made between public and private expenditures based on the nature of the job to which the alimony is allocated. This expression is an indication of the economic idea of ​​public expenditures and the social idea of ​​public expenditures Public expense includes all expenditures of the public sector, which this sector consists of public legal persons with regard to the purpose of public spending. It must achieve a public benefit and the public benefit is achieved if the alimony is allocated to satisfy public needs and economic and social purposes. This content reflects modern financial thinking and the criteria for estimating and measuring the benefit. The public is the vito criterion and the Dalton, somer, Pigu criterion summarizes the vito criterion for estimating the public benefit the maximum public benefit achieved if the marginal sacrifice that individuals incur in order to finance the public expense is equal to the marginal benefit after the deduction. The Dalton, somer, Pigu criterion for estimating the public benefit is summarized by the public benefit achieved. If the marginal benefits of all public expenditures are equal in all aspects of their different uses Among the rules governing public spending is the rule for achieving the largest possible benefits, the base of the economy, the licensing base, and in light of achieving the largest possible benefits, there are several considerations that govern the framers of financial plans when arranging the priority of projects. The most important of these considerations are the cost and return of each of these projects and the necessity of this project for the region The impact of this project on income and national product.

The first to call for the application of the economics rule in public spending is Say. 

To implement the economics rule requires cooperation and concerted efforts of various efforts, including public opinion oversight, administrative and parliamentary oversight, and an efficient administrative apparatus. Regarding the licensing rule, public expenditures are subject to a previous permission from Parliament or the competent bodies.

Strong money contains an economic nature and an economic and investment base that must be recognized because all parts of the 

world need it

Overhead

Public expenditures can be classified in terms of economic nature according to their purposes and according to their effects on national production and according to the scope of their application and according to their regularity and periodicity. Public expenditures can be divided according to their purposes into several categories, the most important of which are administrative expenses, economic expenses, social expenses, financial expenses and war expenses. Educational services and programs are social expenditures. Public expenditures can be divided according to their effects on national production into real and transferable expenditures.

Real expenditures lead directly to an increase in national production.

Among the criteria for distinguishing between real and transferable expenditures is the criterion of consideration, the criterion of direct increase in production, and the criterion of whoever directly consumes resources, and the transfer expense is considered according to the criterion of consideration when it is made by the state without charge for it and the expense is considered real according to the criterion of direct increase in production when it leads to direct use of a part of State resources and when they lead to a direct increase in the national product and the purchase of goods and services previously produced by individuals is considered a real expense, and the expense is considered transformative according to the criterion of the person who directly consumes the available economic resources. If individuals are the direct users of the purchasing power, there are some public expenditures that raise suspicion in terms of their classification within Real or transferable expenditures, including pension salaries, interest on public debt, war compensation, and with regard to the interest paid by the state on loans, they are considered transfer expenditures if the loans are to cover consumption expenditures and they are considered real expenditures if the loans are in order to cover investment expenditures and as for war compensation, these compensation are considered transfer expenditures. If it was compensation from the state for the victims of a For a war, the high volume of transferable public expenditures is due to several reasons, the most important of which is the increase in the volume of public loans, the increase in the introduction of social insurance, the increase in the granting of social benefits, and with regard to the comparison between transfer and real expenditures, the state can compress transfer expenditures more than real expenditures. Public expenditures can be divided according to their scope of application into central expenditures. Among the criteria for differentiating between central and local expenditures are the criteria for the benefit of society, the criterion for determining who bears the burden of public expenditures, and the standard for the budget in which the public expense is received.

The alimony is central according to the standard of community benefit, if it is directed to the benefit of the community as a whole, the alimony is local according to the criterion of determining who bears the burden of public expenditures if society bears its burden through the state’s general budget. Public expenditures can be divided according to their regularity and periodicity into ordinary and extraordinary expenditures and the characteristics of ordinary public expenditures. Periodicity and regularity The salaries of employees are considered normal public expenditures, and road maintenance expenses are considered ordinary public expenditures. The expenses of constructing a dam on a river are considered extraordinary public expenditures and from criticism of the model of dividing public expenditures into ordinary and unusual in terms of the basis. This division is based on a judgmental criterion because it is based on a mere fact. Annual recurrence and criticism of the model of dividing public expenditures into ordinary and extraordinary in terms of purpose. This division is related to traditional finance and it is not correct to apply it in light of modern finance.

Among the factors that determine the size of public expenditures are the nature of the state's role, the state's ability to access public revenues, the level of economic activity and the preservation of the value of money

Public expenditures reflect the reality of the economic system and the reality of the political system.

With regard to the relationship of the size of the state’s tasks to the size of public expenditures, public expenditures increase with the increase in the number of state tasks. The state’s ability to obtain public revenues is determined by the national financial energy. And the role of private activity in economic life and the role of public activity in economic life The type of relationship between the national financial energy and the size of the national income is a direct relationship and the type of relationship between the national financial energy and how the national income is distributed is an inverse relationship in theory and a direct relationship in practice, and the nature of the relationship between energy National finance and the role of both private and public activity in economic life increases with the increase in the role of the public sector and the decrease in the role of the private sector and with regard to the type of relationship between the level of economic activity and the volume of public expenditures is a positive relationship and the actual demand is the government demand for goods and services for consumption and investment and private demand for goods and services Consumption and investment The actual demand is determined at a level Full employment in developed countries and economic development in underdeveloped countries, and when full employment is achieved in developed countries, the consequences of increased public spending, a rise in the general level of prices, the emergence of inflationary pressures, and a decrease in the purchasing power of money.

The first to point out the phenomenon of the increase in the volume of public expenditures over time is the wagner according to the wagner law. The expansion of the state’s activity leads to an increase in public expenditures at a rate greater than the rate of increase in the per capita share of the national product. The ostensible reasons for the increase in public expenditures are the decrease in purchasing power, the change of methods of public accounts and regional expansion. Population growth: The payment by countries of more monetary units than they paid before in order to obtain the same amount of goods and services reflects the rise in the general level of prices and with regard to the rise in the general level of prices, it leads to higher figures of public expenditures allocated to the implementation of state projects. Methods of public accounts that have changed the difference in the content of public expenditures, the difference in the period of public expenditures, the frequency of calculating public expenditures, and the difference in statistical art.

One of the most important methods of public accounts that has changed is the introduction of the total budget method instead of the net budget. One of the real reasons for the increase in public expenditures is the expansion of the scope of wars, political reasons, social reasons, and economic reasons. Among the most important political reasons that led to the increase in public expenditures is the real increase in the spread of democracy and the expansion of international relations and subsidies to countries. Friendship and the spread of socialist doctrine is one of the most important goals that some countries aim behind to provide aid to friendly countries to address an existing crisis and rebuild them, to form political and military alliances, and to create a demand by these countries on the products of the countries providing the aid. The basic public expenditures of a social nature and the most important public expenditures of a social nature are the education expenditures, health expenditures, cultural expenditures and housing expenditures. Public expenditures of an economic nature are called the basic structure of an economic nature. Among the most important public expenditures of an economic nature are the expenses of road construction, means of transport, energy expenditures, irrigation and drainage expenses. Sound to measure the development of th Public expenditures are achieved by the ratio of public expenditures to national income, and the advantages of applying the method of ratio of public expenditures to national income allow measuring the development of public expenditures compared to the economic development of the country and allow comparisons between public expenditures in multiple countries and allow measuring the extent of the state's contribution to the economic and social life of society and is useful in drawing The economic policy of the state and public expenditures directly affect national production through their impact on the ability and willingness of individuals to work, save, invest and finance the elements of production, and in the relationship of the effect of public expenditures on the ability of individuals to work, save and invest directly with work, savings and investment, and in the relationship of the impact of public expenditures on the desire of individuals to Work, saving and investment are always positive with saving and investment and often with work and with regard to pensions, they positively affect the desire to work, savings and investment, and with regard to social benefits, they negatively affect the desire to work and from the forms of public expenditures impact on the transformation of the elements of production, the state’s basic traditional functions. And the state does some project Those whose profits do not directly lead and increase the demand for some goods and services as a result of targeting public expenditures to reduce the costs of these goods and also the subsidies provided by the state to some local bodies to encourage them to perform their functions well. Public expenditures directly affect national consumption through the government’s purchase of some consumer goods and services. And the distribution of the government to enter a partial or complete allocation for consumption and among the objectives of the state purchasing some consumer goods to meet the needs of some of its workers and employees, for the purpose of distributing them for free to some social groups, for the purpose of increasing the stock of them and for distributing them to members of society for partial or total compensation, and the effect of public expenditures on national consumption depends on the type of expenditures. The indirect effects of public expenditures on national consumption are called the speculative effect, and the indirect effects of public expenditures on national production are called the accelerator effect.

Keynes was the first to analyze the speculative effect of the indirect effect of public expenditures on national consumption.