Assignment: Political Thought

Assignment: Political Thought

Assessment 4 Study Guide

Citing:

Shafritz, J. M., Russell, E. W., & Borick, C. P. (2013). Introducing public administration

(8th ed.). Upper Saddle River, NJ: Pearson.

Reading Assignment Chapter 13: Public Financial Management

Unit Lesson

Budgeting is an important area within public institutions. This allows the jurisdiction to reference these important documents when there are questions regarding expenditures, line item purchases, and overall capital budgets. Capital budgets normally are written and established in the year prior to the implementation, for example, budgets for 2013 would be asked for during 2012. These budgets can be used for formulating how much of a surplus will be made available for contractors that may be working for the institution, security measures such as cameras that may be needed for security at a public venue, and being able to budget for supplies that are required for everyday functioning capacity within the organization. Budget formatting can be intriguing for most public entities and the professionals working within those organizations.

The size of technological spreadsheets that cite policies and create a timeline for the expenditures being used have a section specially designated for program objectives, and have a section that normally is set aside to delineate the government’s total service effort. The flow of management funds is the backbone of any institution, government entity, or public service venue. Without the flow of monetary compensation and grant money distribution, there will be limited capabilities for the designated organization to perform the work necessary to manage the business. As with many changes over the past several decades, monetary systems and funds being made available are beginning to diminish from the Federal government. The monies that are received, for example, by a fire department can be used to purchase apparatus, new firefighting clothing and protective equipment, and other provisions to support the public organization.

While looking at the budget from the federal, state, local, or community governments, consideration must be given to whether the monies being used and given to local entities are going to be used for economic growth. There will be disagreements concerning the appropriation of funds and fund management for the communities, but also for the main distributor-the federal government. The budget is the key focal point for public administration to function and make decisions. Monies that are received by public entities create a huge sense of power for those who shape the methods of how the monies are going to be spent. The upper management or executives must learn the conceptual framework that is used for budgeting, financing, and the allocation of those funds that have been received. Thus an accountant will be necessary for any good executive team within the organization. There are several different types of budgets that can be issued for an organization: line item, performance, zero-based budget, multi-year, and integrated budgets, just to name a few in the budgetary reviews that organizations have. One of the areas that need to be attended to during financial management is the overall summary for the monies being spent. A balance sheet should be put together in an effort to summarize the amounts of expenditures that are being distributed. This also provides a summary of what the overall worth of the individual or organization has within its foundational assets.

The organization or individual is further broken down into what is owned and what the other liabilities are that may be owed. A good example of working with a budgetary sheet is when an organization receives grant funding. Grant funding is a good source of revenue for local and state organizations because it impacts health, education, infrastructure, welfare, and transportation, just to name a few. These monies, on occasion, can be limited in some areas and abundant in others. Recently, budgets and the distribution of grant funding have fallen into the categories of population-based decisions and distributions. Thus, the budgetary sheet will be seen differently upon receiving the monies. The economic collapse of 2008 created a caveat for many budgets internationally, but impacted the U.S. economy in all business avenues.

The economic recession ensued after the collapse of the markets, housing industry, and the overall distribution of goods and services in the U.S. At the national level, the oversized debt can lead to a mismanagement of funding, creating budgetary issues nationally, and decrease the economic stability of the dollar globally. Quarterly economic stimulus to balance budgets is fine, however, the increased risk is multiplied with the influx of dollars into the global markets; it may decrease value, increase likelihood for recession, and not allow the budgets to be balanced. The debate will continue to rage forward as new debt controlling measures are introduced in an effort to minimize financial damage that may further occur.

The United States has faced several financial challenges in the past decades. It is noted that during 2011 two Governors faced the fiscal storms of their states. The fiscal storm that engulfed Wisconsin in 2011 began to form long before Scott Walker came to power in January of that year. The recession of 2008 and 2009 left Wisconsin and other states short on revenue and long on budget shortfalls. The influx of federal stimulus dollars helped to lessen the intensity of the budget pain endured in 2010, but as 2011 approached the stimulus money was gone and record shortfalls appeared imminent in America. Walker’s fellow first-term Republican governor Tom Corbett of Pennsylvania seems to have learned from the troubles of his counterpart in Wisconsin. Like Walker, Corbett also began his term with years of experience in elected office.

Facing a similar deep fiscal crisis in 2011, Corbett proposed major cuts to education and welfare programs in the commonwealth. A 50% cut in state support for higher education was particularly upsetting to students at state supported universities. These two governors arrived in office during fiscal storms and chose not to find a hiding place to ride out the poor conditions. Both made tough choices that came with costs to their administrations. Friedrich August von Hayek was an Austrian born economist, a close friend of Keynes. Hayek’s work became the foundation of the modern conservative movement, he not only inspired important disciples such as Margaret Thatcher and Ronald Reagan, but his writing have become a major part of the intellectual basis of the modern American Tea Party movement. As the U.S. economy crawled along in 2010 and 2011, many argued that the focus on controlling debt was holding back the ability of government to push a more robust economic recovery. During the past half century the debt ceiling was raised 75 times, with each president from John F. Kennedy to George W. Bush signing these increases without controversy or ceremony.

This all changed in 2010 when Tea Party candidates for Congress began to pledge that they would oppose raising the debt limit unless the federal government made significant reductions in expenditures. They argued that the high levels of government spending under the Obama administration, including the large stimulus legislation, had exacerbated an already serious debt problem. But they felt that a vote on the debt ceiling could be used as tactic to achieve fiscal balance. When dozens of those Tea Party candidates were elected to Congress, the stage was set for an unprecedented showdown on this previously innocuous budgetary process.