Public debt and the budget deficit

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Conducting fiscal program is the main goal of fiscal adjustment as the only reliable source of improving the welfare of the country is the real growth of the economy.Public debt and the budget deficit with a modern twist are ambiguous interpretation, as some experts believe that using them leads only to an increase in inflation and has no effect on stimulating the economy.Other economists on the contrary, say that the public debt and budget deficits are one of the most effective ways to revive the economy.

scientific inquiry aimed at resolving the economy, is based on optimal balance between social justice and economic efficiency.Already definitely proved that the increase in cash flow to the state budget increases budget expenditures.It is clear that increasing GDP growth and reduce inflation while unrealistic, it can lead to stagnation, a thesis is confirmed by concrete calculations.

Public debt and the budget deficit were considered carefully well-known economists of our time, their thoughts are set forth in numerous works devoted to the development of the modern state of the economy.To understand the basic theses of the exercise, you must know that the state budget is a form of education and spending money intended for the functions of local government for financial security goals.The budget deficit in the state occurs when income and expenses are not the same, while there are economic relations between the Parties, where the use of funds is considerably higher than the allotted budget.

Do not think that the public debt and budget deficits can only negatively affect the development of the economy.In periods of economic downturn to mitigate the situation, government borrowing is used, preventing a sharp drop in demand and have a stabilizing effect on the country's economic policy.In addition, government loans are designed for the additional revenues to finance, which later become the basis for future economic growth.

As economists say the external public debt of the USSR allowed the country to exercise greater total costs than the accumulated national income.Thus, it is seen as government borrowing positive impact on macroeconomic policy.The external debt of the country is often a burden for her, since it is necessary to give valuable goods to pay off the debt, and the lender often puts the state debtor impossible conditions.At the same time, domestic public debt requires a redistribution of income within a country, often it looks like a shift of cash from the poor countries to the more affluent.

Today, there are a number of methodological issues that make it possible to predict the internal public debt of Russia to within a few percent.At the same time there is a clear distinction between the concepts of "government debt" and "public debt."On this basis, one can understand that the debt of the general government do not include the debts of institutions of monetary control, which are formed by taking on the debt of the debtor.

It follows that the question about the order of servicing and repayment of public debt of the country in need of strict control of large and distinct state settlement.