What is the role of public debt from a fiscal and economic perspective?

Public debt refers to a kind of formatted creditor's rights and debt certificates issued to investors in accordance with certain procedures by virtue of their creditworthiness in order to raise financial funds, promising to pay interest and repay the principal at maturity within a certain period of time.

The role of public debt in China's economic development:

1) From a fiscal point of view, public debt is a supplementary form of fiscal revenue and an effective means to make up for deficits and solve fiscal difficulties.

When the state's financial expenditure is temporarily greater than its revenue, and there is a temporary urgent need, the issuance of public bonds is relatively simple and can meet the urgent needs. In the long run, public debt is still a better form of raising construction funds. Some projects with large investment, long construction period and slow results, such as energy, transportation and other key constructions, often need to be actively involved.

2) From an economic point of view, public debt is an important policy tool for regulating and controlling the economy.

a. Regulate accumulation and consumption, and promote the rationalization of the proportional relationship between the two. Public bonds adopt the form of credit, but they only obtain the right to use the funds for a certain period of time and do not change the ownership of the funds.

b. Adjust the investment structure and promote the optimization of the industrial structure.

c. Regulate the financial market and maintain economic stability. Public bonds are a kind of financial assets and a kind of valuable, and the public bond market can become a policy tool to indirectly regulate the financial market.

d. Regulate aggregate social demand and promote the balance between aggregate supply and aggregate demand in aggregate and structure.

Finance and economic development are inseparable from public bonds, and public bonds play a role in the development trend of borrowing and buffering the economy.

Whether the issuance of government bonds is fiscal policy or monetary policy.

This is monetary policy, buying bonds, putting money into the market, bonds** going up, and market interest rates falling.

Fiscal policy refers to the purchases of the Ministry of Finance, including infrastructure projects, national construction, military spending, and so on.

But monetary policy refers to the regulation of money and interest rates and the control of credit in relation to the amount of money issued.

Monetary policy includes general policies such as statutory reserve ratio, open market operations, and rediscount policies, as well as selective policies such as credit control.

Public debt: ** to individuals, enterprises, social institutions to do tricks and other countries pure bored ** borrowing characteristics: voluntary, compensatory, flexible role:

1) Positive role: make up for the deficit of fiscal tolerance, raise construction funds, and regulate economic operation.

2) Negative effects: weaken the budget constraints and expand the scale of fiscal expenditure; Increasing the burden of public debt will have a "crowding out effect" on investment

Characteristics of public debt.

As a variety of bonds in the bond system, public bonds show four characteristics compared with other bonds:

1.High level of security. Among the types of bonds, government bonds are generally considered to have the highest credit rating.

2.Strong liquidity. The secondary market for public bonds is well developed and easy to transfer.

3.Stable returns. The interest payment of public bonds is guaranteed by **, and for investors, the income from investing in public bonds is relatively stable.

4.Tax-exempt treatment. In most countries, tax exemptions are granted on proceeds derived from the purchase of government bonds.

Purpose**A specific way to obtain fiscal revenue according to the principle of recognition, is a special financial activity. Most countries of the same generation have stipulated in their laws that when it is really necessary, they have the right to borrow money from individuals, enterprises, social groups, financial institutions and other countries in the capacity of debtors.

The income in the form of borrowing is the debt income of **, and it is also a liability of **, and the interest and principal must be paid to the creditor in the agreed manner at the time of borrowing. Therefore, in the whole public bond activity, a stable creditor-debt relationship between the first and the public bond holders has been formed. Generally speaking, this kind of relationship is a voluntary transaction relationship between the two parties, which is completely different from the tax relationship formed by the unilateral compulsory and gratuitous collection of ** to the taxpayer.

Public debt cannot be used as a state expenditure**.

Public debt is generally considered to be a form of credit borrowing, so it cannot be directly considered as a deferred state spending. Article 3 of the Public Debt Law of the People's Republic of China stipulates that "the State shall implement a public debt system, establish and improve the public debt management system, and ensure the financial security of the State."

This suggests that public debt is a legitimate means of financing and can be used to support state spending. Conversely, the funds borrowed by the state are often used to finance the operating costs of specific projects or state operations.

When the state needs money to support a particular project or operating costs, it can raise money by issuing bonds to the public.