Analysis of government shutdown as a composition of state`s fiscal policy

Abstract

The object of research is the management of practical issues of the implementation of fiscal policy in the functioning of the budget system of different countries. One of the most problematic places is the implementation of a coordinated policy on education and the use of budgetary funds with the implementation of the threat of stopping the work of the government and forced leave of employees.

The analysis of the modern system of procedures for resolving contradictions between the top leadership of the country and the highest legislative body of the state is carried out. It is found that stopping the work of the government caused significant damage to the economy. The state bears the real costs, as the contractors raise their prices to minimize the risks that arise. Permanent closure and opening of government work require additional costs for reviewing and evaluating the functioning of the programs included in the budget of each institution. In addition, violations of the existing work cycle makes it difficult to plan and launch future projects and require specialists to have additional time to revise work plans each time budget assignments change. In addition, many tax charges are not collected during a government shutdown. It is determined that, through blackmail and threats and other measures, various decisions are taken in the implementation of budget policies that affect social, political and economic issues.

The study used methods of chronological analysis of the budget process, stopping the work of the government and forced vacations of employees. The connection of the decisions made with the budget process and the work of both houses of Congress has been determined. A comparative analysis with similar interruptions of the government’s work in other countries shows that it is perfectly acceptable to solve the problems of fiscal policy without interrupting the work of the government and without sending employees on forced leave. This ensures the ability to effectively manage the practical issues of the implementation of fiscal policy. Compared to more aggressive methods, democratic procedures for the normal organization of the budget process allow for a coordinated policy on education and the use of budget funds without devastating consequences for the economy.