When the US gov passes spending bills like $2Bil for A and $5Bil for B does it mean other things aren’t funded or money is taken away from other projects?
In my day to day experience nothing change whether a spending bill is passed or not, is there somewhere I can see it? Ive heard US national debt works different than personal debt, is that the case and is it related?
In: Economics
Generally speaking, no. Funding bills allocate funding for a particular project, and then the Treasury figures out how to get those funds allocated. When possible, they will use tax proceeds; if they don’t have enough tax money, they’ll borrow.
Funding bills _could_ reallocate or deallocate funding, but they rarely do.
The government can’t spend money unless Congress passes laws allowing them to. That includes paying for salaries of government employees and the military. No defense spending bill, no DoD getting paid. If they aren’t getting paid, the government civilian employees don’t work (mostly).
The same is true for other federal agencies. For example, if there is no Department of the Interior spending bill passed into law, that means that National Parks will most likely be closed. There’s always going to be some exceptions. Critical care in VA hospitals isn’t just going to stop, and the military will report as ordered. A bare minimum to be able to start up operations again when a spending bill is passed will continue to be available.
Yes and no.
More accurate would be to say that government programs are only funded if Congress chooses to fund them. Congress can choose many ways to fund things, and they are not restricted to allocating money that we have. So it’s not necessarily the case that we have, say, $3 trillion sitting in the bank, and if we give all $3 trillion to the military there’s nothing left to spend on other departments.
If there’s $3 trillion in tax money sitting in the government’s bank account (which there isn’t, because that’s not even how government spending works), Congress isn’t restricted to spending $3 trillion. They could write a budget that spends $4 trillion, or $10 trillion, or $30 trillion, or $150 quadrillion, and that budget would get funded through a variety of ways.
This is one way in which you can’t compare government spending to household budgeting. Governments are not restricted in the same ways that regular households are. Among other things, if they need to governments can simply print the money needed to fund budget initiatives, or they can borrow arbitrary amounts through the sale of bonds.
For a variety of different reasons (political and economic) governments don’t usually go hog-wild with spending and try to keep spending roughly proportional to tax receipts (though it has been decades since the last time that tax receipts were greater than budgeted spending). But this is a decision on the part of the government, not a requirement based on money supply.
In practical terms, Congress often does trade budget cuts in one area for spending in another area, but again, that’s for political and economic reasons, not because they have to balance a budget.
Answer: In short, no. Spending bills don’t get money away from other areas.
Every year the government has to pass a budget, where they determine how much they want to spend on everything for the upcoming year. Spending bills are for unexpected expenses.
For example, you have a Roblox subscription for 1,000 Robux a month (this is your budget) but you want to buy some boosters for this new game you just found. But you already spent the Robux from your budget, so instead of waiting, you spend another $10 to get more Robux. This is a spending bill.
The main difference between government spending and personal finance, is that the government doesn’t need to plan for retirement and will never stop earning money (as long as it exists). It also gets way better rates on borrowing money. Because of this it doesn’t really matter how much debt it takes on, as long as it does try to buy so much of something that it would become scared and increase in price. If it did that, it would cause inflation.
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