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109 votes

Why does the EU care so much about the UK divorce payment?

The sum is quite small compared to the EU GDP, but that is not what you should be comparing it to. It would make more sense to compare it to the EU budget (as there the additional money would ...
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99 votes
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Are there any details as to where the $5,710,357,000 to fund part of Trump's wall would come from?

You can think of the treasury of a government as a big pot of money. There are various streams of inputs (taxes, fees, fines, tariffs, new debt...) and lots and lots of streams of outputs (subsidies, ...
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  • 67.4k
75 votes
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Why does the EU care so much about the UK divorce payment?

First off, per the other answers so far, €50 billion (or €100) is by no means peanuts. More importantly, this article gives, I think, a reasonably level-headed breakdown of what the Brexit bill is ...
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65 votes

Why does Germany have such a rather small defense budget?

The 2% goal for defense spending of all NATO countries originates from the Wales Summit of 2014. However, the people who made that commitment are heads of governments, many of which don't actually ...
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  • 67.4k
64 votes

Why does the U.S military use mercenaries?

The US public opinion is highly sensitive to casualties among US troops. They are much less concerned about casualties to contractors, especially if they are not US citizens. At times the US ...
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  • 82.3k
58 votes

Why does the USA have such a large military?

A lot of this has to do with the geopolitical state of the world. World War II changed a lot for the US. The US had been reluctant to enter World War I. President Wilson was reluctant to enter World ...
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  • 38.4k
55 votes

If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?

It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian Italy’s public debt is worth more than 130% of ...
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  • 20.4k
54 votes
Accepted

How is Switzerland able to maintain low tax levels?

Comparing taxation across nations is not trivial, because different nations use different means of taxation; just because the VAT is low doesn't mean that the overall tax burden is. Since you asked ...
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  • 2,464
52 votes

Why does the U.S military use mercenaries?

The reason is the same for any country, not just the US. And it is rarely money. It can be roughly grouped like this: public opinion damage control: the population of a country cares about the death ...
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48 votes

Why does Germany have such a rather small defense budget?

Absolute and relative amounts Germany has come much closer to the 2% goal due to the COVID crisis -- the GDP went down, the defense budget stayed the same, so the percentage went up. Similarly, good ...
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  • 82.3k
47 votes
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Why does Poland receive more in gross and (far more in) net EU funding than any other member state?

A combination of: 1. Low per capita income While not among the very poorest countries in the EU, Poland is far from being the richest. Per capita income in Poland is $12680, compared with $43660 in ...
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46 votes

How can President Biden claim his Build Back Better Agenda costs zero dollars?

IT DEPENDS ON WHAT YOU MEAN BY 'COST.' In politics, the words are often moulded to have meanings beyond what they would mean in common, conversational contexts. Here, the word 'cost,' is being ...
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44 votes
Accepted

If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?

Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it ...
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  • 5,716
36 votes
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How did the European Union reach the figure of 3% as a maximum allowed deficit?

The 3% deficit floor and the 60% Debt-to-GDP ratio were part of the Euro convergence criteria of the Treaty on European Union (Maastricht Treaty). The framework is developed in Article 104c, with the ...
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  • 1,345
35 votes
Accepted

How does the government purchase things?

I understand that the government collects taxes, sells bonds, etc. but regardless of the income portion, I'm more curious about the spending portion. Does the US Treasury simply print the ...
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  • 52.9k
33 votes
Accepted

Why does Trump want to increase military spending?

Bottom Line Upfront: If you don't allow the military to plan for maintenance, but keep them working, then it will cost more to fix them when you start giving them money. Part of it is most certainly ...
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  • 9,981
33 votes
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The DUP have threatened to “vote down the budget” - but what does this mean?

The convention in the UK House of Commons is that the budget vote also works as a confidence vote in the government. So losing a vote on the budget is taken as a vote of no confidence in the ...
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30 votes
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How can the U.S. government ensure that the black budget is spent appropriately?

Such a budget will, inevitably, fall under an executive department, headed by either a Cabinet Secretary, or the President himself. The budget for that department is scrutinised by Congressional ...
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  • 27.7k
29 votes

Why was Australia willing to pay $3.0 B/unit for the French diesel-electric submarines?

I don't have all the accounting details, but one reason supposedly was that 60% of the money was earmarked to go to the local Australian suppliers. Unlike many of the other examples you gave, which ...
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  • 105k
27 votes
Accepted

Why does Germany have such a rather small defense budget?

The main factor has to be the fear of public debt and symbolic importance of balanced budgets (schwarze Null) in the German political discourse. The notion that the state should avoid building up debt ...
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  • 29.6k
25 votes

Why does the USA have such a large military?

Since Lyndon. B. Johnson's time, the US forces were calibrated to be able to fight 2-"2.5" wars at once. In Bush's time, Rumsfeld articulated that (before 9/11) as The current strategic ...
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  • 105k
24 votes

Do any nations have in place formal mechanisms to "save in good years/spend in bad years"?

California has something like this, though it's not a nation (although it is bigger than most). The California Constitution was amended in 2004 and 2014 to create a Budget Stabilization Account (BSA), ...
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  • 25.7k
23 votes
Accepted

Long term, does Trump's wall cost more than it saves per year?

Best-case scenario? Fox News thinks the Wall will save lives by making it more difficult for cartels to bring drugs into the USA. Middle-of-the-road scenario? Stanford put an actual monetary figure ...
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  • 16.6k
21 votes

Why does the EU care so much about the UK divorce payment?

A received payment is money you have. GDP is something entirely different. Politically, giving up 50 billion € is likely to be used against the politicians who are believed to be responsible, whenever ...
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  • 12.8k
21 votes

Why does Denmark spend less of their budget on their universal health care than USA does?

Denmark spends a smaller percentage of their total budget on health care because their government budget in relation to their population is much larger. The US has a federal budget of $3852 billion ...
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  • 67.4k
20 votes

How can President Biden claim his Build Back Better Agenda costs zero dollars?

Apparently, the basis of the zero cost claim is that it will "reuse" unspent funds from a Covid bill. This has been judged a pretty misleading though, e.g. by WaPo, which gave it "2+&...
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  • 105k
18 votes
Accepted

Why does California spend so much on healthcare?

Some basic facts If we look at previous years (using the dropdown menu in your link), we see that it used to be a lot less. The percentage of the budget allocated to health care over the years is: ...
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  • 36.8k
18 votes

Why does Germany have such a rather small defense budget?

Two reasons. First, because there's simply no internal pressure to massively increase defense spending (over 50% in 10 years) in Germany - other answers cover that part in detail and from different ...
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  • 12.8k
17 votes

Do any nations have in place formal mechanisms to "save in good years/spend in bad years"?

Many countries have sovereign wealth funds in which they put their surpluses. Using these funds have several advantages: Clearly separates the budget funds from the surplus. Helps to shield the ...
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  • 27.5k

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