The budget making is a significant process for both the state federal government since it details what the activities of the government will undertake in the next financial year. Furthermore, the budget shapes the national economy based on the policy that the federal government wants to undertake (Goodsell, 2014). Thus, the budget gives an indication on what projects and policy the government is willing to spend its money on and which areas the public and private sectors need to chip in their efforts. Additionally, the budget gives a glimpse of how the government is planning to fund its activities in the next financial year (Kettl, 2014). Additionally, the process brings in bad and good politics between the federal government and congress. As such this politics could attract investors into the economy or discourage them
Therefore, the budget process can make a country economy makes tremendous growth if the government expenditures are geared towards the development. This growth can be achieved if the budget has appropriately allocated adequate funds to improve infrastructures, security, health and wage (Goodsell, 2014). As a result, this will attract the investors to invest into the economy since they know if the consumers have the power to purchase. On the other hand, more investment means more jobs and income tax for the government. However, if the budget has a deficit, it will be bad for the economy since inflation rate will increase and consumers purchasing power reduce. Hence, the economy will shrink. Thus, the government has to look for extra resources like borrowing both domestic and foreign to clear the deficit in the budget. Nevertheless, the Federal government can reduce the number of programs and projects it wants to undertake in the next financial year (Kettl, 2014).
Therefore, the deficit in the budget forced the federal government and the congress to make appropriate decisions on which public policy are appropriate for the public. Thus, the budget shapes the government programs and the general expenditure of the government (Kettl, 2014). In this case, the government has to make appropriate decisions as to which programs can be supported by the government revenues and where the public and private sectors can offer their services to citizens on behalf of the government.
References
Goodsell, C. T. (2014). The new case for bureaucracy. Thousand Oaks, CA:CQ Press. ISBN 13: 978-1-4522-2630-9
Kettl, D.F. (2014). Politics of the administrative process, 6th edition. Washington, DC: CQ Press. ISBN 13: 978-1-4833-3293-2
