The main characteristics of national debt:
National debt is a special form of debt, which has the following characteristics compared with the general creditor-debtor relationship:
From the perspective of the subject of legal relationship
The creditors of national debt can be citizens, legal persons or other organizations at home and abroad, or the government and international financial organizations of a certain country or region, while the debtors can only be countries.
Judging from the nature of legal relationship
The occurrence, change and elimination of the legal relationship of national debt mostly reflect the unilateral will of the state. Although the legal relationship of national debt is equal to other financial legal relationships, it shows a certain subordinate relationship compared with the general creditor-debtor relationship, which is more obvious in the legal relationship of domestic debt.
From the realization of legal relationship
National debt is the creditor-debtor relationship with the highest credit rating and the best security.
From the debtor's point of view
National debt is voluntary, paid and flexible.
From the creditor's point of view
National debt has the characteristics of security, profitability and liquidity.
The purpose of issuing national debt:
1, increase military spending
During the war, the amount of military expenditure was huge, and in the absence of other financing methods, funds were raised by issuing war bonds. Issuing war bonds is a common way for governments in wartime, and it is also the earliest origin of national debt.
2. Balance fiscal revenue and expenditure
Generally speaking, fiscal revenue and expenditure can be balanced by increasing taxes, issuing additional currency or issuing government bonds. Compared with the above three methods, it is a good way to increase taxes from the people, but the tax increase has certain limits. If the tax is too heavy and exceeds the affordability of enterprises and individuals, it will not be conducive to the development of production and will also affect future taxes. Issuing additional currency is the most convenient way, but it is also the least desirable, because using additional currency to make up the fiscal deficit will lead to serious inflation and the most serious impact on the economy. It is still a feasible measure to make up the fiscal deficit by issuing government bonds when it is difficult to increase taxes and issue additional currency. The government can absorb bills by issuing bonds.
Individuals and individuals' idle funds help the country tide over financial difficulties. However, the circulation of deficit national debt must be moderate, otherwise it will also cause serious deflation.
3. Raise construction funds
The country needs a lot of medium and long-term funds to build infrastructure and public facilities. By issuing medium-and long-term treasury bonds, some short-term funds can be converted into medium-and long-term funds, which can be used to build large-scale national projects and promote economic development.
4. Issuance of borrowing and exchanging treasury bonds
Lending and borrowing swap bonds are issued to repay bonds due. At the peak of debt repayment, in order to solve the problem of the source of debt repayment funds, the state issued loan swap bonds to repay the old debts due. "This can reduce and disperse the country's debt service burden.
Repayment method:
Repayment by installments. That is, a national debt stipulates several repayment periods, and the principal is fully paid off when the national debt expires.
Revolving withdrawal and repayment method. That is to say, a certain proportion of national debt is determined by drawing lots regularly according to the national debt number until the repayment period ends, and all national debt is paid off by drawing lots.
One-time repayment at maturity method. In other words, the national debt is paid off in one lump sum according to the par value of the maturity date.
Market purchase and sale compensation law. That is, to buy back the national debt from the securities market, even if it expires, this national debt has been fully held by the government.
Replace the old repayment method with a new repayment method. That is, by issuing new treasury bonds in exchange for expired old treasury bonds.
Source of funds:
Adopt the budget. The government will include the annual repayment of national debt as a fiscal expenditure item in the expenditure budget of the year, and normal fiscal revenue will ensure the repayment of national debt.
Use fiscal surplus. When there is a balance in budget implementation, this balance will be used to pay the principal and interest of the national debt due in the current year.
Set up a sinking fund. The government budget sets up a special fund to repay the national debt, and allocates special funds from the fiscal revenue every year to set up a fund dedicated to repaying the national debt.
Borrow new debts to pay off old debts. The government issues new bonds as a source of funds to repay old debts. The essence is the extension of the debt period.