Public Debt

Examples of Public Debt in the following topics:

• Deficit Spending, the Public Debt, and Policy Making

  • Deficit spending and public debt are controversial issues within economic policy debates.
  • Otherwise the debt issuance can increase the level of (i) public debt, (ii) private sector net worth, (iii) debt service (interest payments) and (iv) interest rates.
  • Deficit spending may, however, be consistent with public debt, remaining stable as a proportion of GDP, depending on the level of GDP growth.
  • The United States public debt is the outstanding amount owed by the federal government of the United States from the issue of securities by the Treasury and other federal government agencies.
  • US public debt consists of two components:

• The Public Debt

  • Government debt, also known as public debt, or national debt, is the debt owed by a central government.
  • Government debt, also known as public debt, or national debt, is the debt owed by a central government.
  • However, this practice simply reduces government interest costs rather than truly canceling government debt. shows each country's public debt as a percentage of their GDP in 2011.
  • Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders).
  • This map shows each country's public debt as a percentage of their GDP.

• The Budgeting Process

  • Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001) contributing to a total debt of $16.1 trillion as of September 2012.
  • The United States public debt is the money borrowed by the federal government of the United States through the issuing of securities by the Treasury and other federal government agencies.
  • US public debt consists of two components: Debt held by the public includes Treasury securities held by investors outside the federal government, including that held by individuals, corporations, the Federal Reserve System and foreign, state and local governments.
  • Debt held by government accounts or intragovernmental debt includes non-marketable Treasury securities held in accounts administered by the federal government that are owed to program beneficiaries, such as the Social Security Trust Fund.
  • Debt held by government accounts represents the cumulative surpluses, including interest earnings, of these accounts that have been invested in Treasury securities.

• Fiscal Policy and Policy Making

  • Contractionary fiscal policy, which occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt .
  • If the interest and capital requirements are too large, a nation may default on its debts, usually to foreign creditors.
  • Public debt or borrowing : it refers to the government borrowing from the public.
  • Consuming prior surpluses: A fiscal surplus is often saved for future use, and may be invested in either local currency or any financial instrument that may be traded later once resources are needed; additional debt is not needed.

• The 14th Amendment

  • The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
  • But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

• Fiscal Policy

  • Contractionary fiscal policy occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt.
  • If the interest and capital requirements are too large, a nation may default on its debts, usually to foreign creditors, while public debt or borrowing refers to the government borrowing from the public.
  • When the government runs a budget deficit, funds will need to come from public borrowing (government bonds), overseas borrowing, or monetizing the debt.

• Impact of the Articles of Confederation

  • The Land Ordinance of 1785 and Northwest Ordinance created a territorial government, set up protocols for the admission of new states and the division of land into useful units and set aside land in each township for public use.
  • Also, states refused to require its citizens to pay debts to British merchants, straining relations with Great Britain.
  • The states and the Confederation Congress both incurred large debts during the Revolutionary War, and how to repay those debts became a major issue of debate following the war.
  • Some states paid off their war debts and others did not.
  • Public interest groups advocate for issues that impact the general public, such as education.

• Powers of the American Government Under the Articles of Confederation

  • The states and the national congress had both incurred debts during the war, and how to pay the debts became a major issue.
  • Some states paid off their debts; however, the centralizers favored federal assumption of states' debts.

• The First Political Parties: Federalists and Anti-Federalists

  • He devised a complex multi-faceted program to achieve that goal and simultaneously solved the debt problem for most of the states.
  • Hamilton created a financial system for national and international stability that included paying off the national debt and laying the infrastructure for further economic development.
  • the creation of a system of taxes and tariffs to pay for the debt; and

• Article VI

  • All debts contracted and engagements entered into, before the adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.
  • The Senators and Representatives before mentioned, and the members of the several state legislatures, and all executive and judicial officers, both of the United States and of the several states, shall be bound by oath or affirmation, to support this Constitution; but no religious test shall ever be required as a qualification to any office or public trust under the United States.