Analysis Paper

DISCUSSION

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Explain how budget formats channel thought. Explain how formats can direct thought to and highlight general policy matters, budget balancing issues, and improvement of the quality of government management

Budget formats the channel of thought by creating the impression that some issues are urgent than others. The urgent issues receive massive allocation of resources, while less urgent issues receive less allocation of resources. Individuals judge as per the resources that have been allocated to an entity within the budget (Musell, 2009). The budget also indicates the government’s commitment to certain policies as they allocate more resources towards the implementation of such policies. A budget improves the quality of government management as it provides for the division of the available resources. It also helps the government to plan for the available resources within a given period.

Explain the impact of revenue sources and expenditures on budget building. The government receives debt from the citizens in terms of treasury bonds and treasury bills. These are forms of public borrowing. The government bond enables a government to seek long-term debt from its citizens, while a treasury bill enables the government to seek a short-term debt from its citizens (Musell, 2009). The local government and state governments use municipal bonds as a way of raising funds for its operations. The municipal bond is also a form of debt issued to the government by its citizens. The government may also seek debt from private means. These include seeking funding from local and international banks to achieve different government functions.

What are the various types and forms of debt? Explain the advantages and disadvantages of the various debt instruments. The advantage of public borrowing is that the government can access long-term debts from its citizens. The disadvantage of this form of debt is that there are high interest rates that accompany this form of financing (Musell, 2009). The advantage of private borrowing is that the government can access large amounts of funding. The main disadvantage in this approach is the high interest rates associated with banks.

References

Musell, R. M. (2009). Understanding government budgets: a practical guide. New York, NY: Routledge.