Final answer:
The purpose of incurring obligations and making payments from the Treasury is to control expenses, with the overarching aim of funding public services and managing the economy. Taxes are the primary means of raising revenue, and borrowing can cover deficits. Tax policies can have significant economic impacts.
Step-by-step explanation:
The purpose of incurring obligations and making payments out of the Treasury for specified purposes is to control expenses. This process allows the government to allocate funds towards various public services and investments that contribute to the country's welfare and economic stability. When governments run budget deficits, the difference between tax revenue and spending is made up by borrowing, commonly through the issuance of Treasury bonds, notes, and bills.
Governments may also use tax policies and spending to influence the economy and achieve broader policy goals, such as economic growth, inflation control, and employment. For instance, progressive taxation and strategic government spending can redistribute wealth, stimulate demand, and counter economic downturns. As illustrated historically, tax policies can either encourage or discourage certain behaviors among residents, influencing economic performance at both individual and national levels.