Chapter 2Public Finance and How Government Creates Cash Flow

“I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.”

—Thomas Jefferson

UNDERSTANDING GOVERNMENT FINANCE—in terms of how the various entities generate the necessary funds needed to meet the expenditures, is necessary to maintain services and accommodate public policy—is critical in creating sound systems to prevent fraud and mismanagement. Today's society is built on credit and debit cards and the ability to pay through phones, PayPal, and other technologies. Yet, government deficits continue to rise. In this chapter, we continue to work to bridge the communication gaps that often continue to gape between the professionals and the general public by guiding you through the byzantine maze of how government generates sufficient cash to continue providing services to the citizenry.

As we stated in chapter 1, watching the trusted parties' visual cues and verbalizations with respect to their personality behavior surrounding their financial responsibilities potentially generates warning signs ...

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