Question

Examine any one of the following aspects government debt of the US or any country:

1) The rationale, pattern and trend of government debt under different presidential administrations.

2) Ways and means of financing and repaying government debt.

3) The effectiveness of government budget deficit financing options.

4) The elements of the 2008/2009 financial crisis and lessons for the present US government.

5) Debt management strategies of US government or any country.

6) The composition of government debt and economic implication.

Answer 1

Answer 1.

b.) Ways and means of financing and repaying government debt.

Treasury bills: Government issues and sells Treasury Bills and other types of securities to banks and public to finance their debt. Anyone can buy government securities online.

By taxation and printing new money government can finance its debts but they are not appropriate methods. They have major adverse effects.

The best way for the government to finance its debt is by issuing government bonds and securities.

The government can take the loan from commercial banks also to finance its current debts.