Why does the government spend money?
One thing government can do with tax revenue is transfer it to people in the economy. “Transfers” are the product of complex political and social negotiations and are promulgated and defended on the grounds that the government has a social responsibility to support certain people or encourage certain behaviors. Examples of transfer programs include Social Security, Medicare, Medicaid, Transitional Assistance to Needy Families (welfare), Food Stamps, and Unemployment Insurance.
