In order to know the meaning of the term public spending, it is necessary, first of all, to discover the etymological origin of the two words that give it shape:
-Expense 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 relates to the people."
The act of spending is called 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 that belongs to everyone.
The notion of public spending , therefore, refers to the economic outlay made by a public Administration . The State 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 society and to allow the state apparatus to function. While the State spends 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 population's access to healthcare.
-Promote what is the economic growth of the country.
-Ensure and consolidate existing justice.
-Take the necessary measures to protect and care for the environment.
-Improve employment in the country.
When public spending exceeds public income, it is called a public deficit or fiscal deficit . In these situations, more money leaves state accounts than comes in, which can be a problem. In any case, it must be taken into account that, unlike what happens with companies, the purpose of a State is not to make profits.
Consumption or current expenses ( the money that allows public services to be provided, acquire goods and services and pay the salaries of officials), transfer expenses (the money that is given to families and companies that need help), social security (retirements, pensions, etc.) and 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 carry out an accountability report .
In the same way, we cannot forget what is known as investment spending. Under this name 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 "Public Budget and Expenditure Magazine", which aims to enable professionals in the economic sector to be up to date with the aforementioned economics of public spending.