Government Budget Process

The federal government uses an accounting system called base line budgeting. Last year's budget is assumed to be adequate, programs need funding adjustments and all funds will be spent for the fiscal year.

A dirty little secret is that towards the end of the budget year the remaining balances are moved around within the different agencies and are systematically spent so funds are not carried over. State and local governments do roughly the same thing. Different items may be changed but the total budget is the about the same plus the year's inflation factor. The budget must be balanced as state and local levels.

Next taxes are raised to supply the money to pay for all the items in the budget. The federal government does not have a system to match expenditure and revenue thus the national debt.

Your personal budget does not have an automatic way of adding inflation and for most taxpayer our net income is reduced. The question is how do I influence the different governmental levels to stop this hidden tax?

For more information go to www.makemoneywork.info