Anonymous

What Does National Debt Mean?

3

3 Answers

Rajesh Shri Profile
Rajesh Shri answered
National debt means debt of the nation or debt of the government. Since Government is generally representative of people, Government debt of national debt is actually debt of people or tax payers. Hence national debt is also known as public debt. All levels of government, i.e., Central government, federal, government, municipalities or state governments can have national debt.                There can be different categories of National debt. It can be debt internal to the country and people lend this money to the government or it can be debt external to the country where the government borrows money from other countries or bodies outside the country. So in either case the government owes money to either internal lenders or external lenders. For raising money internally, government does so by issuing securities which are called bonds of bills. Sometimes Government can borrow directly from commercial banks Bonds can be short, intermediate or long term. Short term is considered generally as one year or less, Medium can be three to eight years, and long term is ten years or more.    External loans can be loans that a government takes from the world bank and such international bodies. Loans can also be taken from governments of more affluent countries.

Answer Question

Anonymous