The national debt is the sum of previous government spending or budget deficits?

Date:

2018-04-28 17:00:33

Views:

783

Rating:

1Like 0Dislike

Share:

Table of contents:

People are familiar with the concept of property debt: loans from banks installment in stores, etc. the national debt is the sum of preceding

And who is the state and why? Is it profitable to lend to the government? What is the meaning of "public debt"? This is the sum of previous loans or expenses? We will try to look into this further.

The concept of the budget

The national debt – is the sum of prior budget deficits.

the national debt is the sum of preceding

This is one of the definitions. A key concept in it – budget. This is the sum of all expenditures and revenues of the state. The sources of its recharge are:

  • Direct taxes: personal income tax, income, Unified agricultural, etc.
  • Indirect – excise taxes when buying different goods: cigarettes, alcoholic beverages, foreign cars. Tomorrow the list may be extended with a variety of sodas, energy drinks, chips, as the authorities at the highest levels to discuss it.
  • License fees.
  • Fines, penalties, etc.

Budget

This money will be transferred to the state budget, and then, depending on the amount of planned internal and external expenses.

the national debt is the sum of the previous state costs the success of the policy the budget can be:

  • Surplus-revenues exceed expenses.
  • Balanced – equal performance.
  • Scarce – revenues are less than expenses.

It is believed that the ideal is a balanced budget that speaks to the balanced policy of the state and proper management.

Causes of budget deficit

Hence the concept of public debt – is the sum of the preceding costs and revenues.  the national debt is the sum of previous budget deficitsThe Reasons can be different:

  • Changing market situations, for example, falling oil twice.
  • The Change of power in the country, and as a result, mismanagement of finances.
  • Increased financial social obligations relating, for example, with a demographic boom of the population.

As we have said, the national debt – is the sum of previous budget deficits. But it may increase and upcoming expenses. What does it mean? The budget of the country for a very long time, it is planned for the next years. In Russia it is accepted for several years. The government already knows how much it has to spend tomorrow: pensions, public sector wages, public contracts, etc.

Recommended

Calculation and payment of sick leave

Calculation and payment of sick leave

Sick Pay provided by the legislation of the Russian Federation, in particular TC and FZ No. 255. In addition, some rules are governed by the provisions of the civil code. Any employee upon the occurrence of a certain disease should contact a health f...

Employee certification for compliance with the post: purpose, procedure, result

Employee certification for compliance with the post: purpose, procedure, result

Employers perceive the order of certification of employees as a formality. Regulations intended for commercial organizations, were not issued. Certification is required only for employees of the organizations designated in the laws of the spheres, le...

Registration of vehicle: procedure, sample application, certificate

Registration of vehicle: procedure, sample application, certificate

Every person who buys a car needs to do its registration in the traffic police. It is necessary when purchasing new or used cars, as well as no matter whether the seller of natural persons or legal entities. Check the vehicle is in the traffic police...

That means today's public debt-is the sum of the previous state costs, which should be higher than the income over the previous period. We must not forget that due to certain reasons, he may rise in the coming years. To understand the mechanisms of how the government balances this situation, we turn to the concept of "Federal bonds" (OFZ). More about this below.

Federal loan Bonds (OFZ)

Federal loan Bonds-are securities that are traded on the Moscow exchange. In fact, it is ious that the government issues a certain percentage. During the various procedures they get to the exchange, where, through the mediation of traders and stock brokers an investor to buy them. The purpose – increase of capital with minimal risk under the guarantee of the state. Of course, it can also deceive, who lived in 1998 know such a thing as a default - failure to pay its obligations. Despite this authorities are trusted more than commercial companies which can be bankrupt any day now.the national debt is the sum of preceding

Federal loan Bonds represent a kind of receipts to bearer. For their honesty watching the exchange. Investors today are buying debts for which after a certain time you can earn income. There are OFZs on which payments must be made in 20-30 years. Their owners typically receive annual bonuses (coupons).

We said above that the public debt is the sum of the preceding costs. But where did the money come from? Who is the state? One of the sources – OFZ. That is, the budget is already scheduled for the payment of the obligations in the following years, but the forecast has deteriorated. In this case, the Ministry of Finance on the rights of the Issuer with the Central Bank trying to prolong that is to delay debt payments. It offers more lucrative coupons (interest) on the bonds and increases their nominal value (the sum of the applicable obligations at the end of the billing period).

So the national debt is the sum of previous budget deficits.

Government debt

Depending on the sources of cash loans, the public debt is divided into:

  • Internal;
  • Exterior.

The Internal is formed by Federal loan bonds on the Moscow exchange. the national debt is the sum ofAbout what bonds we have already said. External debt can be generated from different sources. The main ones are:

  • The international Monetary Fund - the largestthe lender States on the planet. The organization was founded by private sponsors, but actively cooperates with the UN and the European Union.
  • International banks.
  • Other States.
  • Bonds on the international trading platforms.

Any public debt in foreign currency is automatically considered to be external, as the authorities and the Central Bank can't cut various financial tools like devaluation, inflation, denomination, etc.

Government debt today

We have said that the national debt – is the sum of previous budget deficits, but what is its value today.the national debt is the sum of the preceding fiscal deficits

In October 2015, the Government needs 7.4 trillion rubles in domestic debt, and by the middle of 2016, this amount increased to 7.9 trillion rubles.

The External debt amounts to $ 7 billion, which is negligible compared to the country's GDP. However, the authorities declared active borrowing on international exchanges, as well as in the domestic market.

For example, the US debt – 19 trillion dollars. The amount seems impressive, but it amounts to 109% of GDP. If Russia had such a duty, given the macroeconomic indicators, we would have paid it for several generations.

Will not Default?

Before you argue about the default of a particular country, it is necessary to correlate the level of GDP, the amount of debt and service it.

The Situation on the Russian market, exacerbating the debts of large corporations. Formally, these figures are not included in the debt of the state budget, but in fact the authorities sponsor these companies, and many of them directly affect our well-being. At the beginning of 2016, the debt of corporations amounted to 599 billion dollars, which is much more tangible 7 billion Given the sectoral sanctions of the West, we can say that these companies can't borrow from foreign banks, and, therefore, to refinance, to defer their debts. If the situation does not change soon, companies will start to default one by one. This will lead to a deterioration of the rating of trust in the country, as no one wants to invest in companies that can simply disappear.

Conclusion

Now, the national debt – this is the amount that has the government to investors to cover budget deficits over the past years. I hope the article was useful and informative.


Article in other languages:

AR: https://tostpost.com/ar/the-law/7363-the-national-debt-is-the-sum-of-previous-government-spending-or-budget.html

BE: https://tostpost.com/be/zakon/13172-dzyarzha-ny-do-g---geta-suma-papyaredn-h-dzyarzha-nyh-rashoda-abo-byud.html

DE: https://tostpost.com/de/das-gesetz/13178-staatsverschuldung-ist-die-summe-der-vorangegangenen-ffentlichen-ausga.html

ES: https://tostpost.com/es/la-ley/13190-de-la-deuda-p-blica-es-la-suma-de-los-anteriores-los-gastos-p-blicos-o.html

HI: https://tostpost.com/hi/the-law/7370-the-national-debt-is-the-sum-of-previous-government-spending-or-budget.html

JA: https://tostpost.com/ja/the-law/7368-the-national-debt-is-the-sum-of-previous-government-spending-or-budget.html

KK: https://tostpost.com/kk/za/13177-memlekett-k-aryz---b-l-t-mendeg-lerd-somasy-memlekett-k-shy-ystardy-ne.html

PL: https://tostpost.com/pl/prawo/13169-d-ug-publiczny-to-suma-poprzednich-wydatk-w-publicznych-lub-bud-etu-ni.html

PT: https://tostpost.com/pt/a-lei/13164-a-d-vida-p-blica-o-montante-anteriores-de-gastos-do-governo-ou-d-ficit.html

TR: https://tostpost.com/tr/hukuk/13178-devlet-bor-toplam-nceki-kamu-harcama-veya-b-t-e-a-klar-n-n.html

UK: https://tostpost.com/uk/zakon/13175-derzhavniy-borg---ce-suma-poperedn-h-derzhavnih-vitrat-abo-byudzhetnih.html

ZH: https://tostpost.com/zh/the-law/8018-the-national-debt-is-the-sum-of-previous-government-spending-or-budget.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

Comments (0)

This article has no comment, be the first!

Add comment

Related News

242 FZ on personal data protection. Federal law 242 (FZ on personal data): changes and comments

242 FZ on personal data protection. Federal law 242 (FZ on personal data): changes and comments

In Russia there is a separate law under which various organizations and individuals must carry out operations of personal data — law No. 152-FZ. In the legal act from time to time, the legislator makes changes. In particular...

Classification of fires

Classification of fires

each person has the word “fire” is terrifying. Fire – this is an uncontrollable phenomenon that destroys everything in its path. Therefore, people need to know about it as much as possible to not only resist him,...

Housing office - what is it? Infrastructure

Housing office - what is it? Infrastructure

What is a housing office, what are his duties and functions? All about the housing maintenance office will be discussed in this article.What is the ZHEK?the term "housing maintenance company" is outdated in Russia in 2005, but sti...

What the Labour code says: easy work for pregnancy, conditions, payment, transfer features

What the Labour code says: easy work for pregnancy, conditions, payment, transfer features

Modern women often do not report to their employers about pregnancy, because I fear that they will be fired. However, working conditions are not always favourable for the health of the expectant mother and child. Says that the wom...

Yakuza is the Japanese mafia. History, leaders. Interesting facts

Yakuza is the Japanese mafia. History, leaders. Interesting facts

In any, even the most civilized country along with law-abiding citizens and criminals. Gradually, they begin to unite, while the Union of criminal elements is not converted into a real mafia. Illegal groups were involved in the tr...

Administrative-remedial measures: definition, description and features

Administrative-remedial measures: definition, description and features

In administrative law uses the term "administrative remedial measures". A clear definition in the legislation. Next, try to understand what are the administrative-remedial measures. Examples some of them will also be described in ...