Local governments derive their power from State constitutions and State laws. The Full Faith and Credit Clause of the Constitution provides that State laws and court decisions must generally be honored by other States.

Somewhere between a unitary system and a confederal system is a federal system. This is what the US has today. It is a system in which both the national government and the state governments are assigned powers by a constitution.

The federal design divides power between multiple levels of government–often state and national. As defined, federalism is an institutional arrangement creating relatively autonomous levels of government, each able to act directly on behalf of the people with granted authority.

Dual federalism

States have more power than the federal/national government. A system in which sovereignty is shared so that on some matters the national government is supreme and on others the state, regional, or provincial governments are supreme. Power is shared equally between the national government and the state government.

How the U.S. Government Is Organized

• Legislative—Makes laws (Congress, comprised of the House of Representatives and Senate)
• Executive—Carries out laws (president, vice president, Cabinet, most federal agencies)
• Judicial—Evaluates laws (Supreme Court and other courts)

Whereas the federal government and state governments share power in countless ways, a local government must be granted power by the state. In general, mayors, city councils, and other governing bodies are directly elected by the people.

Spending for correctional institutions is the largest functional spending category for state and local governments. The federal government provided economic assistance to state and local governments through the American Recovery and Reinvestment Act.

Of course, people expect state and local governments to provide services such as police protection, education, highway building and maintenance, welfare programs, and hospital and health care. Taxes are a major source of income to pay for these services and many others that hit close to home.

State and local government spending increased by 4.0 percent from 2009 to $3.1 trillion in 2010. Education topped government spending (860.0 billion), followed by public welfare ($456.7 billion), insurance trust expenditures ($359.8 billion), and utilities ($206.2 billion).

Money spent by governments. Salaries are the single largest expenditure for state & local governments.

The two largest spending categories of state and local government spending are Education and Health Care. State and Local governments receive most of the income is through taxes, and therefore, spend the majority of funding on improvements of society, such as public education and medical care (Colander, 61).

education

What regulates the ways state and local governments can raise and spend money? The federal government provides – to help states pay for some of their programs. Grants-in-aid. State electoral districts must be equally – , or based on population.

Government purchases include any spending by federal, state, and local agencies, with the exception of debt and transfer payments such as Social Security. Overall, government purchases are a key component of a nation’s gross domestic product (GDP).

Governments at the federal, state, and local levels contribute to the nation’s economy when they provide services to the public and when they invest in capital. Consumption expenditures and gross investment are the measures of government spending included in calculations of gross domestic product, or GDP.

Government spending represents government consumption expenditure and gross investment. Governments spend money on equipment, infrastructure, and payroll. Government spending may become more important relative to other components of a country’s GDP when consumer spending and business investment both decline sharply.

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GNP = C + I + G + X + Z Where C is Consumption, I is investment, G is government, X is net exports, and Z is net income earned by domestic residents from overseas investments minus net income earned by foreign residents from domestic investments.

The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. 1 That tells you what a country is good at producing. GDP is the country’s total economic output for each year.

What four economic groups determine a nation’s GDP? Households, business firms, the government, and foreign buyers.

GDP measures the value of goods and services produced within a country’s borders, by citizens and non-citizens alike. GNP measures the value of goods and services produced by only a country’s citizens but both domestically and abroad. GDP is the most commonly used by global economies.

We know that in an economy, GDP is the monetary value of all final goods and services produced. Consumer spending, C, is the sum of expenditures by households on durable goods, nondurable goods, and services. Examples include clothing, food, and health care.

Gross domestic product, or GDP, is a measure used to evaluate the health of a country’s economy. It is the total value of the goods and services produced in a country during a specific period of time, usually a year. GDP is used throughout the world as the main measure of output and economic activity.