The Importance Of Public Finance

By Leslie Ball

People in the city of Scotts Valley CA have realized the importance of money. The necessity of money is not only for individuals but for the state as well. The state is required to do different functions for which money or finances are needed. To developed a country, the government is required to perform important functions such as in the industrial, education and agricultural developments.

These functions are only possible if there is enough money or funds to avoid any constraints in the process of development. Everything of these angles can be viewed through the California public finance which is very important. It is best to understand its importance. It can be viewed through stabilization, distributive and allocative functions.

The allocative function is referring to the process by which the total resources used are divided between private and social goods by which the social goods are chosen. This can be done by the budgetary policy. Basically, the distribute function is a budgetary policy that affects the distribution of income in the community., The tax and expenditure measures are adopted to modify proper distributions to lessen economic inequalities.

The stabilization functions can be used to maintain the high level of employments based in the degree of price level stability. There is also an appropriate rate of economic growth and the stability in the payment balance. Aside from these, public finance is important because it is an efficient and effective instrument to control the economy. Studying public finance is important especially for under developed countries as the management of state finances is crucial to break the circle of poverty.

It also plays a key function in eliminating some inequalities of income or wealth in the economy. Basically, it can be achieved by transferring the power of purchasing from the wealthy ones to the needy ones. When the state impose certain progressive taxes from those wealthy ones, they can also provide many facilities to the less privilege individuals which will create equity in the society.

Also, public finance offers the government essential programs for the moderation of income of the poor and wealthy citizens which includes social security or welfare. The government also redistributes the income by collecting some taxes from the rich ones to give sufficient resources to the needy ones. These programs have supported those who have low incomes.

In the modern generation, subsidies and grants are inevitable to produce goods and services meant for masses. It has a certain place in the governmental expenditure of most developing states. Most of the natural resources of these developing countries are underutilized or over utilized. The proper utilization of these resources is also important not just only for the present generation but for the unborn ones.

The state may also direct the flow of distribution, consumption and production in the country using the budget policy, The state have the rolling plans within the year and for the coming years. Therefore, they need the combination of resources including the effective taxation and public borrowing.

There are also market inadequacies and private sectors of the economy that may fail to address and satisfy the needs of the community. The market fails to provide the desired set of goods and services as well as the distribution of income and poverty. Also, it fails to achieve a certain stability in employment and prices.

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