Public debt and budget deficit of the country

The implementation of the financial and budgetary program is the main goal of budget regulation, since the only reliable source of improving the welfare of the country is the real growth of the economy. Public debt and budget deficits in modern interpretation have a mixed interpretation, as some experts believe that their use leads only to an increase in inflation and does not affect the stimulation of the economy. Other economists, on the contrary, say that public debt and the budget deficit are one of the most effective ways of reviving the economy.

The scientific search aimed at settling the economy is built on the optimal balance between social justice and economic efficiency. It is already quite certain that increasing the flow of funds to the state budget leads to an increase in budget expenditures. It is clear that increasing GDP growth rates and simultaneously reducing inflation is unrealistic, this may lead to stagnation, such thesis is confirmed by specific calculations.

Public debt and budget deficit were carefully considered by well-known economists of our time, their thoughts are set forth in numerous works devoted to the development of modern state economy. In order to understand the basic theses of these exercises, it is necessary to know that the state budget is a form of education and spending of funds intended for the functions of local government and for the financial provision of tasks. The budget deficit arises in the state when incomes and expenses do not coincide, thus there are such economic relations between participants when use of money resources happens much above the taken away budget.

Do not think that public debt and the budget deficit can only negatively affect the development of the economy. In periods of economic downturns, state borrowing is used to mitigate the situation, preventing a sharp drop in demand and having a stabilizing effect on the country's economic policy. In addition, state loans are designed to supplement the country's finance, which will subsequently become the basis for future economic growth.

According to economists, the external public debt of the USSR allowed the country to carry out greater aggregate costs than the national income earned. Thus, it is clear how public borrowing positively influences the country's macroeconomic policy. The external debt of a country often proves to be an unbearable burden for it, since it is necessary to give valuable goods in order to repay the debt, and the creditor often sets the debtor state impracticable. At the same time, domestic public debt requires a redistribution of income within the country, often it looks like a transfer of money from the poor to the more affluent.

To date, there are a number of methodological problems that allow us to forecast Russia's domestic public debt to within a few percent. At the same time, there is a clear division between the concepts of "public sector debt" and "public debt of the country". Based on this, it can be understood that the general government debt does not include the debts of monetary institutions that are formed from taking over the debt of third-party debtors.

It follows that questions about the order of servicing and repayment of a country's public debt need strict control and a clear state settlement.