What determines a countries budget for the year? defense spending, healthcare and education spending, things like buildings parks and buildings. etc.
some countries has more than the double spending of budget than the country has exports.
Like, do they pull money out of thin air? taxes goes there, that I know.
But how can the top 10 budgets in the world be so high when their exports isn’t?
And how would it be for a country whose entire sector is state owned (like USSR, which at some points has the highest gdp in the world)?
How can a countries budget for the year be higher (and sometimes much much higher) than the countries exports last year?
byu/This-Wear-8423 inAskEconomics
Posted by This-Wear-8423
1 Comment
‘Country’ is not an economic unit, governments* fund their spending from taxes first and foremost, then from sovereign funds or nationalized sectors (if they have those). If the spending exceeds the government revenue, fiscal or otherwise, they go in debt. In the crushing majority of countries, the biggest portion of taxes is levied from domestic economic activity.
This has very little to do with exports, which are decentralized between thousands of private entities, except on the taxes levied on said exports, which are a minute portion of the totality of collected taxes.