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HOUSEHOLD SECTOR: The basic macroeconomic sector that includes the entire, wants and-needs-satisfying population of the economy. The household sector is the eating, breathing, consuming population of the economy. In a word "everyone," all consumers, all people. This sector includes everyone seeking to satisfy unlimited wants and needs. While it's called "household" sector, this doesn't require that you own a house, live in a house, or even know someone has ever seen a house to be included. The term household sector is merely a short-cut used by economists to indicate the consuming, wants-and-needs-satisfying population.
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                           GOVERNMENT SUBSIDIES: Transfer payments from the government sector to the business sector that do not involve current production. This is one component of the official entry government subsidies less current surplus of government enterprises found in the National Income and Product Accounts maintained by the Bureau of Economic Analysis that separates national income (the resource cost of production) and gross (and net) domestic product (the market value of production). Much like government makes transfers to the household sector to assist (presumably needy) individuals, government makes transfers to the business sector to assist (presumably needy) firms. Household transfer payments include welfare to the poor, unemployment compensation to the unemployed, and Social Security payments to the elderly and disabled. Business transfer payments (occasionally referred to as corporate welfare) include direct payments or tax deductions to business firms for a variety of reasons.- Specific Activity: Firms are often given subsidies to encourage particular actions, such as training employees, reducing pollution, implementing specific production techniques, or developing new technologies. Farmers receive federal subsidies to reduce the problems caused by unstable agricultural markets.
- Local Growth: State and local governments have a long history of inducing firms that employ a number of workers to locate in their areas through generous subsidies.
- Public Utilities: Privately-owned public utilities or quasi-public transportation systems are often subsidized by the government because they provide valuable production that cannot be profitably exchanged through markets.
- Bankrupt Firms: On occasion, a nationally prominent firm on the verge of bankruptcy is subsidized to help it through difficult times.
- Friends of Government: And more than a few special "breaks" have been inserted into tax laws by members of Congress on behalf of a particular firm that may or may not be the direct result of a hefty campaign contribution.
From a national income perspective, government subsidies are added to the pool of revenue that the business sector has available for making factor payments (which also makes it part of national income). But because the business sector does NOT receive this revenue as payment for producing goods, it is not part of gross domestic product.
Recommended Citation:GOVERNMENT SUBSIDIES, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: December 1, 2023].
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BLUE PLACIDOLA
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Today, you are likely to spend a great deal of time at a dollar discount store seeking to buy either a how-to book on home decorating or a set of luggage with wheels. Be on the lookout for fairy dust that tastes like salt.
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"Sometimes our light goes out, but is blown into flame by another human being. Each of us owes deepest thanks to those who have rekindled this light. " -- Albert Schweitzer, missionary physician
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KCBT
Kansas City Board of Trade
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