StudentShare solutions
Triangle menu

Economics Debt - Essay Example

Nobody downloaded yet

Extract of sample
Economics Debt

Historically, one of the main challenges to government leaders is the generation, and the application of a country’s wealth and resources towards “three main duties of great importance. These are as follows: protecting the country from violence and invasion; protecting, as far as possible, every member of the society from oppression and injustice, and thirdly, erecting and maintaining public works, public institutions, which can never be for the interest of any individual or group of individuals. Financing the state was basically through revenue raised through “taxes of one kind or another (Smith 476).1 Public debt was not unheard of, but was held suspect.
In the last two decades, most countries have been experiencing periods where their outlays exceed their revenues, with no balanced budget in sight. Governments faced the formidable task of managing runaway budget deficits and growing public debts, both internal (owed to nationals), and external (owed to foreigners). To cover the shortfall or deficit, governments sell public assets, levy taxes, print and/or borrow money. Government borrowings to finance deficits create “public” debts, which need to be serviced through interest payments or through refinancing. Obligations of government resulting from issuing guarantees for a public sector enterprise added to the public debt become what are known as the “federal debt (Iqbal 2)2.”
Available data showed that by 2007, 124 countries had been running on borrowings and that many of these countries had breached the acceptable level of public debt -to -GDP ratio. The US debt-to-GDP ratio had risen to 60.8 % in 2007. Other countries exhibited higher debt-to- GDP ratio; Japan’s debt-to-GDP ratio reached 170%, Germany, 64.9%, and Canada, 64.2 %( Nationmaster1)3. Public debt and budget deficits had become a global phenomenon and the principles of balanced budget and surplus became part of a ...Show more


US trade policy is also integrated in the paper, but only to the extent that it impacts on budget deficits and public debt. There are three underlying considerations of…
Author : grahamtamia
Economics Debt essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Economics Debt"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Debt Financing
There has always been a debate over the equity and debt financing for capital structure and it still continues (Becker & Stromberg, 2010). The increasing importance of debt financing in modern era of business has encouraged for the study of debt financing, which will be discussed in this paper.
10 pages (2500 words) Essay
Government Debt and Global Competitiveness
..3 US Government Debt……………..……………………………………………………………4 Default on the US Government Debt.………………………………………………………….5 What Am I to Do? ………………………………………..………………………………….
3 pages (750 words) Essay
European Debt Crisis
However, Wallison (2012, p. 71) expressed the view that “in a true sovereign debt crisis, a country cannot meet its debt obligations, largely because it does not have enough of the currency in which its debt is denominated.” The European sovereign debt crisis began in 2008 with the banking crisis in Ireland with the contagion of the crisis spreading out to Greece, Ireland and Portugal in 2009 (Investopedia 2012).
6 pages (1500 words) Essay
Deficit, Debt and Political Theory of Government Debt
Deficit, Debt and Political Theory of Government Debt Introduction Budget Deficit being highly dangerous vs. Ricardian Equivalence The theory of Ricardian equivalence is a theory of Economics by Robert Barro. The theory states that when a government proposes a tax cut to increase consumer spending, this leads to a higher budget deficit financed by more treasury bonds, which does not lead to much economic growth.
6 pages (1500 words) Essay
Debt and Taxes
However, there are cases where the revenue from taxation has not been enough and hence governments have resorted to borrowing. This paper has examined the relationship between tax and debt. There is a general observation that the level of tax may not necessarily determine the debt accumulation rates.
5 pages (1250 words) Essay
Least Developed Countries Debt Crises
Much like personal finances, debt should not be passed along to the next generation without an accompanying asset (Hevesi 2005, p.3). International debt is a major issue for many of the world's poorest nations. Loans taken by developing countries to pay for previous development projects still weigh heavily on current national budgets.
9 pages (2250 words) Essay
Development Economics nd interntionl debt crisis
It hs generted series of intrctble problems with no esy solutions. ccordingly, lthough ll world leders, including the Pope nd Nelson Mndel, hve clled for the elimintion of debt, technicins hve not found solutions stisfctory to both debtors nd creditors. Prt of the reson for this lck of consensus is tht debt does not exist in vcuum.
12 pages (3000 words) Essay
Debt Crisis in Developing Countries
Developing countries are faced with low standards of living, underdevelopment, and high poverty levels, weak and unstable currencies, low capital levels and low GDP. All the above problems faced by developing countries are caused by debts which affect not only those who acquire loans but also generations that follow.
12 pages (3000 words) Essay
This report looks at the question of the ‘who will produce’ aspect defined here. Government, in its role of economic regulation and policy definition, has
2 pages (500 words) Essay
European Union Debt
The cause of these debts varied between countries. Notably, the composition of the European zone as a monetary block governed by one currency that lacks a fiscal arrangement to harmonize the taxes and
2 pages (500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment