ABSTRACT
Most studies of the budget are concerned with the political processes through which government expenditures are determined, and the reasons why governments spend more on some things than on others. In the United States the three major types of expenditure are defense expenditures, the provision of services such as education and police, which cannot efficiently be provided by the free market, and transfer payments such as Social Security, which take money from one group of people and give it to a different group. In terms of the categories developed in the article by Musgrave in part 1, most of the expenditures on defense and services are on public goods, while most transfers are intended to redistribute to those perceived to be particularly deserving of public aid.
