Headed for a debt crisis?

Published: 27 Feb 2013 at 00.00
Newspaper section: News

It is true that a certain level of public spending is necessary to perform essential government policies, but what if tax revenue is not able to cover those necessary government expenditures?

The obvious answer here is for the government to take on debt. Is this a bad thing? Absolutely not.

Public debt, if used properly and managed well, can be a fundamental tool to build an economy and a country. All the government needs to do is ensure their spending is properly targeted and that debt grows more slowly than tax revenue in the long-run.

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pjt
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Discussion 2 : 27 Feb 2013 at 13.352
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It would be sensible to constrain the forecast debt/GDP % to below the 60% considered safe in order to allow a contingency to handle emergencies - which we know happen in the economic world with monotonous regularity. One of the things which hit some of the European economies is they were already up to and over the limit before the financial crisis struck and thus had no where to go when further burdens appeared. If you have a cushion you also do not need to tighten the belt nearly so much or so quickly in order to get debt levels back down to sustainable levels
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lungstib
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Discussion 1 : 27 Feb 2013 at 13.291
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Herein lies the problems with 'democracy' as discovered by the Greeks, Spanish and Italians. Staying popular by giving things away.
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Headed for a debt crisis? | Bangkok Post: opinion