The US economy is currently the most powerful in the world. For example, in 2013, the GDP of the USA amounted to 16.7 trillion dollars, of which 1.1% was created in agriculture, 22.1% in industry, and 76.8% in the service sector.
This country is a leader in science-intensive industries’ development like aviation and rocket-space technology, electronic equipment, namely computers, microcircuits, and new construction materials. Scientists and engineers of the USA own most of the scientific discoveries of the last decade in the area of technology and biotechnology. At the same time, researchers emphasize that such great global achievements of the USA are due to the coordinated work of systems (in particular, the financial system and different organizations like Payday Depot) responsible for various branches of the economy.
Features of the US financial system
The uniqueness of the financial system of the USA is determined, first of all, by the federal system of this country. It consists of 50 states and one district (the District of Columbia). Every state has Republican powers, its legislative, executive, and judicial branches of power.
The current US federal finance system consists of the following elements:
1) finances of the federation include the federal budget, the budget of the District of Columbia (capital city), special funds of the federal level, finances of state corporations;
2) finances of 50 states, each of which has its own budget, special funds, and finances of state-owned enterprises;
3) local finances, consisting of local budgets (counties and other local administrative units, including districts, municipalities, cities), municipal finances, various funds.
The organization of the financial system in the USA is characterized by a high level of autonomy. Each of the levels of state administration conducts budget and tax policy independently. In general, about a third of GDP is redistributed through public finances.
All government spending is distributed between the levels of the financial system in approximately the following proportions: federal finances account for 60%, state finances – 15%, and local finances – 25%. National defense and some programs of social protection, as well as expenses for servicing the national debt, economic development, foreign relations, and financing of the national government are provided at the national level.
Considering the finances of the United States, we can note that the movement of resources in them occurs simultaneously through four channels:
- from the federal budget to state and local budgets;
- from state budgets to local budgets;
- from local budgets to state budgets;
- between local budgets.
There is a steadily growing dependence on federal subsidies based on own revenues of state and local governments. Federal aid to states (23%) and local governments (6%) has a pronounced program and target nature. Grants and subsidies in the USA are distributed unevenly. With their help, more than 500 target programs are implemented at the state level. Such growing dependence on federal subsidies gives reason to claim that federal aid (29% of total state and local government revenues) has become a means of direct federal control over the financial policy of states and local governments.