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What is a national debt?

What does national debt mean?

National debt is a bond issued by the state. It is a kind of bond issued by the central government to raise financial funds. It is a bond issued by the central government. A credit and debt certificate issued to investors that promises to pay interest within a certain period of time and repay the principal upon maturity. Since the issuer of treasury bonds is the state, they have the highest credibility and are recognized as the safest investment tools.

The issuance of treasury bonds generally has the following purposes:

1. Issuing war treasury bonds to raise military expenses during wartime.

During the war, military expenditures were huge. When there was no other way to raise funds, funds were raised through the issuance of war bonds.

2. To balance the national fiscal balance and make up for the fiscal deficit, deficit government bonds are issued.

*** The issuance of bonds can absorb the idle funds of units and individuals and help the country tide over financial difficulties. However, the issuance of deficit government bonds must be moderate, otherwise it will also cause severe inflation.

3. The state issues construction bonds to raise construction funds.

The country needs a large amount of medium and long-term funds to build infrastructure and public facilities. By issuing medium- and long-term treasury bonds, part of the short-term funds can be converted into medium- and long-term funds for the construction of the country. large-scale projects to promote economic development.

4. Issue treasury bonds to repay maturing treasury bonds.

During the peak period of debt repayment, in order to solve the problem of the source of funds for debt repayment, the country issues government bonds to repay mature old debts. "This can reduce and disperse the country's debt repayment burden.

Extended information:

The difference between public bonds and national debts

Public bonds: Public bonds are a specific way to obtain fiscal revenue based on the principle of appropriation. A special financial activity. In most countries of the same era, it is stipulated in the laws that when the government is really necessary, it has the right to borrow money from individuals, enterprises, social groups, financial institutions and other countries as a debtor.

The income in the form of borrowing is ***'s debt income and is also a liability of ***. *** must pay interest and repay the principal to the creditor in the manner agreed at the time of borrowing. Therefore, Throughout the public bond activities, a stable creditor-debt relationship has been formed between *** and the public bond holders.

Generally speaking, this relationship is a voluntary transaction relationship, which is completely different. The collection relationship formed by the unilateral compulsory and gratuitous collection of taxes reflected in the tax rate

National debt: Public debt is sometimes called national debt, where the law does not allow it. For countries where government borrows money, the two concepts are consistent, that is, they both refer to the debt of the central government. However, in countries that allow local governments to borrow debt, generally only the debt of the central government is called national debt. The borrowings of local governments can only be called public bonds or local bonds.

Therefore, public bonds = national bonds + local bonds (if permitted by law)

Sogou Encyclopedia - National Debt

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Sogou Encyclopedia - Public Bonds

What are national bonds?

National bonds, also known as national public bonds, are based on the country’s credit and in accordance with the general principles of bonds, through The creditor-debt relationship formed by raising funds from the society.

National bonds are bonds issued by the state. They are a type of bonds issued by the central government to raise financial funds. They are issued by the central government to the government. A credit and debt certificate issued by an investor that promises to pay interest and repay the principal at maturity. Since the issuer of treasury bonds is the state, it has the highest credibility and is recognized as the safest investment tool. From the perspective of legal relationship entities: the creditors of national debts can be domestic and foreign citizens, legal persons or other organizations, or governments and international financial organizations of a certain country or region, while the debtors can generally only be states.

From the perspective of the nature of the legal relationship: the occurrence, change and elimination of the national debt legal relationship mostly reflects the unilateral will of the state. Although compared with other financial legal relationships, the national debt legal relationship is an equal legal relationship. However, compared with the general creditor-debt relationship, it reflects a certain degree of subordination, which is more obvious in the legal relationship of national internal debt.

Reference: Baidu Encyclopedia - National Debt.

What is a national debt?

National debt, also known as national public debt, is a creditor-debt relationship formed by a country raising funds from society based on its credit and in accordance with the general principles of debt.