Part A: Contrast and comparison of the value of the traditional budget, the performance budget, and the capital budget
The traditional budget
Traditional budgeting mainly involves using the preceding year’s budget to create a spending plan for the current year. As such, adjustments are made on the previous year’s budget by modifying the costs based on factors such as the increase in price, buyer demand, and market state, among others. Even though traditional budgeting has a wide range of drawbacks, it is of great value. It is of great importance as it offers a stable control framework. Since traditional budgeting has a reference point which is the previous year’s financial data, it becomes easy to manage monetary activities (Wildavsky, 2017). For instance, with the traditional budgeting, a company can cut on the current manufacturing costs of their products by considering last year’s trends of the consumer demand.
The performance budget
A performance budget plays a significant role in improving the performance of the government and organization. It typically involves assessing the output of various programs or processes to prepare an expenditure plan. The most profitable operations receive the biggest cut of the budget. Consequently, courses which have been regarded as highly productive advance on their performance and become more effective (Kelly & Rivenbark, 2014). For instance, allocating the highest share of a budget to a healthcare program focused on reducing child mortality rate can facilitate the hiring of more employees who will handle a large population. As a result, the death rate is likely to significantly reduce.
In addition, performance budgeting is important as it involves a clear purpose. It involves defining a clear objective on how the money will be spent. The purpose ensures that any deviations from the course do not occur. Consequently, this facilitates performance.
The capital budget
As for the capital budget, it is important as it enables the government and organizations to determine which projects are likely to be the most profitable in a particular time. A capital budget is determined by identifying and assessing the possible huge investments (Wildavsky, 2017). A likely mission is evaluated based on its cash inflows and outflows and then the returns that it is likely to yield is compared against a target benchmark. By doing so, one can make a decision on whether it is worthy to invest on the project using the capital which is often limited.
Capital budgeting is similar to performance budgeting in the sense that both are concerned with high productivity unlike traditional budgeting. However, unlike traditional and performance budgeting, capital budgeting involves assessing projects which are yet to be established. A traditional budget is also significantly different as it only uses the previous year’s data to come up with a spending plan.
Two branches involved in the budget process and why
The executive and the legislative branches engage in the development of the budget.in the initial stage of budget-making, the president delivers a budget demand to the Congress. This happens on every February of the next fiscal year (Diamond, 2013). The role of the legislative branch which comprises of the House of Representatives and the Senate is to review pass the budget resolutions. Finally, the President signs the bill and the budget into law.
Part B: The fiscal and economic impact of population growth in the U.S
Financial hypothesis gives bits of knowledge into the components whereby migration may affect wages and work in an accepting nation. By expanding the supply of work, a scene of movement is anticipated to diminish the wages of specialists as of now in the work advertise who are most like the fresh debuts; the livelihoods of others may increment, either in light of the fact that foreigners’ aptitudes supplement their own or on the grounds that the profits on capital increment because of changes to the work compel (Summers, 2014). The blend of abilities controlled by arriving workers regardless of whether unskilled workers, experts, business visionaries, or evacuees will impact the size and even the bearing of compensation and business impacts.
Given the potential for numerous, separated, and once in a while concurrent impacts, financial hypothesis alone isn’t equipped for creating conclusive answers about the net effects of movement on work showcases over explicit periods or scenes. Observational examination is required. Be that as it may, compensation and business impacts made by streams of outside conceived specialists in the process of childbirth markets are hard to quantify. The impacts of movement must be confined from numerous different impacts that shape neighborhood and national economies and the overall wages of various gatherings of specialists (Summers, 2014). Firms open and close, individuals resign, laborers switch employments, and a surge of youthful local conceived occupation searchers becomes an adult. Changes happen in innovation, worldwide supply chains, universal exchange, and remote venture. The inflow of the remote conceived.
In the recent past, the effect of high-talented outsiders on local wages and work got less consideration than that of their low-gifted partners. Enthusiasm for concentrate high-gifted gatherings has picked up force as the H1-B and other visa programs have added to a quick ascent in the inflow of expert outside conceived laborers (around 250,000 individuals for every year amid the most recent decade) (Summers, 2014). A few investigations have discovered a positive effect of gifted migration on the wages and work of both school instructed and no college-taught locals. Such discoveries are predictable with the view that gifted migrants are regularly reciprocal to local conceived laborers, particularly the individuals who are talented; that overflows of compensation upgrading information and abilities happen because of communications among specialists; and that gifted foreigners enhance adequately to raise by and large profitability. Nonetheless, different examinations analyzing the income or efficiency winning in barely characterized fields locate that high-gifted migration can affect the wages or profitability of locals working in those fields.
Diamond, J. (2013). Policy formulation and the budget process. In The international handbook of public financial management (pp. 193-218). Palgrave Macmillan, London.
Kelly, J. M., & Rivenbark, W. C. (2014). Performance budgeting for state and local government. Routledge.
Summers, L. H. (2014). US economic prospects: Secular stagnation, hysteresis, and the zero lower bound. Business Economics, 49(2), 65-73.
Wildavsky, A. (2017). Budgeting and governing. Routledge.