One of the functions of state economic policy is to support the country's financial stability. Before the crisis of 2009, this function in the United States was performed by special financial supervisory authorities, each having its own influence in a separate state. A consolidated, integrated approach to this issue became the main theme of the Obama financial reform plan , which was published in the summer of 2009. Bills of financial importance, continuing the development of reforms, were developed in 2010.
The US financial system is considered an accurate reflection of government and power. As in many developed countries, it consists of budgets of various levels and bodies that control their income and expenditure.
The US financial system must fulfill the standard three main functions:
The first is the government apparatus, the courts, or the army.
The next function is the redistribution of income between certain segments of the population or territories, and the US financial system was the prerequisite for this. This function favorably affects the provision of a comfortable social and economic climate in the country.
And finally, the third function was developed in the 30s of the 20th century after the economic crisis. Its main purpose is to use budget funds as a tool to stimulate the growth of the state economy and support the development of the business sector. The modern financial system of the United States shows that in an efficient economy, the state should play the role of a reliable and natural partner, and not opposing the entrepreneurial sector of power.
The US budget system has its own quality features. So, the principle of "budget federalism" is traced. In other words, there is an effective interaction of the three state systems - revenues, expenses and relations between budgets.
The system of state revenues consists of a combination of tax and non-tax revenues that operate in the country and will be able to ensure public expenditures, and it is also necessary to include here methods of collecting revenues and regulating budget revenues in law. The state system of expenditures consists of preparing a draft budget with its subsequent refinement in the executive bodies, then approval (adoption) in Congress and mandatory control over its implementation.
The principle of “budget federalism” mentioned above stipulates that each level of government has its own sources of revenue, but there is a likelihood of allocations from the budget of the highest level if necessary.
The US budget system is inextricably linked with fiscal policy. This is expressed in the development and adoption of decisions on the conduct of economic activities with mandatory coordination with the state budget policy. And vice versa - all budgetary measures of the country are developed by specialists and carried out in the direction of the state general economic strategy.
The US monetary system is part of the state’s financial system and is characterized by regulation by its central bank of America and the Treasury Department.
In the 70s of the 20th century, the main task of the reserve federal system was to maintain inflation at a low level, which ensured the stability of money circulation in the country and the strengthening of the dollar in the form of a reserve currency.
Since 1981, the government began tightly regulating money circulation by limiting the money supply and increasing interest rates. Thanks to these measures, a decrease in the inflation rate was achieved and the dollar was strengthened by an increase in its rate in comparison with other currencies.