5.2.4 Oversight

What procedure is followed for allocating funds? In the United States, the Federal Reserve has been given monetary authority and Congress has been given fiscal authority. In other words, both parties possess the capacity to produce and destroy currency, each in a different manner. Congress has the power to both generate and eliminate money through federal taxation and spending. The Federal Reserve has the authority to buy securities to reduce debt, issue treasury bonds, and determine interest rates for these bonds and other reserves.

This division shows which budgetary programs under the control of Congress are mandatory and which are optional. It is required to pay for Social Security, Medicare, and college loans   On the other hand, defense and bailout plans are optional. One benefit of required spending is that, unlike expenditures, which is frequently delayed by protracted debates, it typically doesn’t require authorization and can therefore be more responsive to changing demands.

Given that the seat of government is typically held by a wealthy elite, neither of these systems can be properly labeled as “democratic” and are instead better categorized as plutocracies. There are numerous strategies for managing financial resources. Participatory budgeting is one of them. This strategy encourages the growth of people by having an informed populace participate in a supported budgetary process together.