One indicator of smart fiscal practices is maintaining balance between spending and revenues. Occasionally deficits may be necessary.
At the federal level, there are two categories of budgetary expenditures: entitlement and discretionary spending.
Under the U.S. Constitution, people are entitled to compensation when a government takes their property. This is known as a taking.
Policymakers can take action to stimulate the economy.
Two government budget practices that can have significant implications for lower levels of government are block grants and unfunded mandates.
Federal and state governments have tried to change budget rules to control government spending. Budget rules have also been used to impose fiscal discipline.
Government budgets reflect the priorities of policymakers.