In order to know the meaning of the term public expenditure, it is necessary, first of all, to discover the etymological origin of the two words that give it its shape:
-Gasto we have to establish that it derives from Latin, specifically from the verb “vastare”, which can be translated as “devastate”.
-Public, for its part, also comes from Latin. In his case, it emanates from “publicus” and this word from “populicus”, which means “that which belongs to or is related to the people”.
Is named spending to the act of spending: using money for something. The term can also refer to the amount that is spent. Public, for its part, is that which belongs to the State or belongs to everyone.
The notion of public spending, therefore, refers to financial outlay that performs a Public administration. The Condition allocates money for the purchase of goods, the hiring and provision of services and the granting of subsidies, for example. The money involved in these transactions is part of public spending.
At a general level, it can be said that public spending is used to satisfy the needs of the society and to allow the functioning of the state apparatus. While the State spends the money for these purposes, it in turn receives it through the collection of taxes and other operations.
Specifically, we can establish that the most important objectives of public spending are the following:
-Allow citizens access to what education is.
-Distribute existing wealth.
-Ensure that all citizens can enjoy a dignified life.
-Facilitate and improve the access of the population to health.
-To promote the economic growth of the country.
-Ensure and consolidate what the existing justice is.
-Take the necessary measures to protect and take care of what is the environment.
-Improve employment in the country.
When public spending exceeds public revenue, we speak of public deficit or fiscal deficit. In these situations, the state accounts show more money from entering, which can be a problem. In any case, it must be borne in mind that, unlike what happens with companies, the purpose of a State is not to make a profit.
The consumption or current expenses (the money that allows to provide public services, acquire goods and services and pay the salaries of officials), transfer costs (the money given to families and businesses that need help), the social security expenses (retirements, pensions, etc.) and the capital expenditures (infrastructure) make up public spending. The Executive Branch has a budget that must be approved by the Legislative Branch to meet these expenses, and in turn must render accounts.
In the same way, we cannot forget about what is known as investment spending. Under this denomination is the amount of money that the State allocates to improve, increase, create or replace what is the public capital that already exists.
In the same way, we cannot forget that in Spain there is what is known as the “Budget and Public Expenditure Magazine”, which aims for professionals in the economic sector to be able to keep up to date with the aforementioned economy of public spending.