...Public debt External debt of Indonesia has been declined to around 28% in 2013. This speaks to a healthy condition contrasted with developed nations that are at present stuck in an unfortunate public debt. Thus, Indonesia's showed attractive decline in export percentage; from 179.7 % in 2004 to 97.4% in 2011. These percentages calculate the administration's capacity to make future instalments on its debts, therefore emphatically influencing Indonesia's cost of borrowings, government security yields and global credit assessments when this debt is as low as on account of Indonesia. This improvement is especially because of the judicious monetary arrangement methodology of the Indonesian government and consistence with financial principles that set cut-off points on the upper level of debt. Biggest Contributors to Government Debt in Indonesia Biggest creditors of Indonesia is united states and japan and other 25% is borrowed from the international organisation like world bank, asian development organisation and etc. The forecasts done about indonesia’s GDP again moderate sliding in governments debt due to appreciation in rupiah, reduction in interest rates, and robust economic growth. Debt of Indonesian to GDP Ratio from 2008 to 2015: There is only little impact in Indonesia’s debt ratio in macroeconomics. depreciation of currency in Indonesia is 30% and it would increase the public debt ratio about 25 % of GDP. The hike in real interests rates may have a little change...
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... Done by: The goal of this paper was to analyze and explain the auction system process held by US Treasury and the possible alternatives for it (multiple-pricing auction). Introduction. The U.S. Treasury Department regularly borrows to finance the Federal Government's debt. From 1980 to 2006, the public debt of the United States grew from $930 billion to $8.68 trillion. Approximately one-half of that debt is held in Treasury bills, notes, and bonds, or "treasuries." The Treasury Department sells these securities at auctions held at the Federal Reserve Bank of New York, and the Bureau of Public Debt (BPD) in Washington, D.C. The rest of the debt is held mostly in federal and federally sponsored agency securities and U.S. Savings Bonds, and is not sold through the auction process.1 The modern auction process for bills, notes, and bonds begins with a public announcement by the Treasury. A typical announcement might read, "The Treasury will auction $11,000 million of 91-day bills to refund $9,000 million of maturing securities and to raise about $2,000 million new cash." This statement clearly describes the 2 goals of Treasury: to refund old debt and to raise new funds. Such announcement is carried by most major newspapers, the financial press, and some television stations. Bids are accepted up to thirty days in advance of the auction, and may be submitted electronically through the Treasury Automated Auction Processing System (TAAPS) and by mail...
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...Fiscal Policy and Social Security Policy During the 1990s Douglas W. Elmendorf Federal Reserve Board Jeffrey B. Liebman Harvard University and NBER David W. Wilcox Federal Reserve Board Revised July 2001 This paper was presented at a conference on “American Economic Policy in the 1990s” held June 27 to 30, 2001 at the John F. Kennedy School of Government, Harvard University. The views expressed in this paper are those of the authors and are not necessarily shared by any of the institutions with which they are affiliated. We thank Al Davis, Peter Diamond, Edward Gramlich, Peter Orszag, Gene Sperling, and Lawrence Summers for comments on an earlier draft. Elmendorf was formerly Deputy Assistant Secretary of the Treasury in the Office of Economic Policy, and prior to that Senior Economist at the Council of Economic Advisers; Liebman was formerly Special Assistant to the President for Economic Policy at the National Economic Council; and Wilcox was formerly Assistant Secretary of the Treasury for Economic Policy. Table of Contents Page 1. Introduction 2. Budget Outcomes and Projections Improved Budget Picture Sources of Improvement 3. Budget Deficit Reduction: 1990 through 1997 OBRA90 OBRA93 What Did Deficit Reduction Ultimately Accomplish? The Republican-Controlled Congress BBA97 4. Entitlement Reform and Saving Social Security First Entitlement Commissions Social Security Saving Social Security First 5. Social Security Reform Options Using Projected Budget Surpluses as Part...
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...The concern is that China’s debt does not take into account its weak local government finances, bad loans in its banking system, and the future costs of an aging population. This means that if China wishes to offer tax cuts and boost spending, they have less room than imagined. Nearly all tax revenue in China goes to the central government, so local governments such as provinces and townships rely on fiscal transfers from Beijing, as well as independent revenue sources such as land sales, which can be unreliable. This gives them a strong incentive to continue borrowing massive amounts of money from state-owned banks and private trusts, debts for which the central government could ultimately be responsible if they turn bad. Local governments depend on land sale proceeds which count for around 25% of their revenue. Last year official data showed that this declined by 14% nationwide due to a central-government campaign to hold down property prices. Local governments' revenue and debt challenges come as China seeks to narrow income and promote urbanization. These are priorities that will require huge outlays in areas such as health care, education and urban infrastructure over the coming years. Things China isn’t accounting for. Andrew Batson, an analyst at research firm GaveKal Dragonomics says, “In the past, the central government has pushed responsibility for funding such priorities on local governments and state banks, a way to meet its conservative debt and deficit targets. But...
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...Analysis: Debt-to-GDP ratio – United States compared to Germany Econ 201 Alexandria Walker University of Maryland University College Professor Mensah-Dartey Analysis: Debt-to-GDP ratio- United States compared to Germany United States Debt- to-GDP ratio In the last year the United States has painfully reached the net public debt to GDP ratio of 100 percent. This would be the federal government’s accumulated debt that is equal or has actually surpassed the United States Gross Domestic Product in 2010. After the debt ceiling limit was passed, the Treasury borrowed $238 billion in 2010. This brought public debt to $14.58 trillion dollars, slightly higher than the United States GDP in 2010, which was $14.54 trillion. It is believed that this is purely a domestic political issue. The international ramifications of the growing national debt are equally as important the domestic ones. After all, the United States primary creditors are overseas. The United States economy forms the bedrock of the global economy. Washington has the largest and most diverse economy in the world. Its currency is even more important, as the dollar is the currency used in most international transactions. This economic disaster stems from a troublesome history. The history of modern civilization is unique in that it contains some very simple figures that always act as causation for a certain result. In the case of debt, what is clear is that any country who sees its debt levels...
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...8421786 How is public debt related to economic growth and unemployment? In this project different economic factors will be compared with each other to see if any correlations exist between them. These will perhaps explain certain trends and changes we see. The three factors focused on in this report are GDP growth, Government Debt and Budget surplus/deficit. In the data provided there is a very large standard deviation for GDP (see appendix). In both 2009 and 2010 the standard deviation was over four and a half times larger than the average of GDP itself. This will make it hard to create general assumptions for all countries to assess whether different factors correlate with each other. Even other factors such as GDP growth have relatively large standard deviations. This may cause difficulties in examining factors. An example of ambiguous data can be seen when comparing Canada and India. They both had fairly similar GDP and debt figures in 2010 but India’s GDP growth was around three times that of Canada’s. This shows that we cannot make hard-and-fast rules on links between different factors but we may be able to make general connections and assumptions. Distribution of GDP Growth and Government Debt within countries Figure 1: GDP Growth (2009-2010) 60 50 Number of Countries 40 30 20 10 0 Frequency GDP Growth 2009-2010 (% change) As we can see from Figure 1 distribution of GDP growth is relatively small, with 93.4% (171/183) countries having a growth between 0% and...
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...This essay will talk about what is currently going in Europe with the Eurozone sovereign debt crisis and the fiscal state the European Union is in, it is important and interesting because it is still current affairs and there are various factors and decisions that have helped the path that the crisis is going in, this essay will look at the crisis but on the implications and problems that European union face as well as what they have faced already and whether the European Central Bank are doing enough to improve the situation and what their plans are for the future. A sovereign bond serves as a floor for interest rates banks charged for loans and for the pricing of other financial contracts and securities. The global financial crisis led to the deterioration of government budgets and finances as nations utilized public expenditures to provide stability and stimulus. The Eurozone suffered because of heavy borrowing practices, property pebbles and living above their means. The Eurozone debt crisis started because Greece who had borrowed heavily in international capital markets over the past decade were turned against by investors this is because Greece in 2009 admitted that they had double the amount of debt that was allowed in the Eurozone limit. Ratings agencies started to downgrade Greek bank and government debt, and there was fear of Greece defaulting and not being able to pay back its debts but the Greek Prime Minister George Papandreou insisted otherwise however this was not...
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...Nigerian Government Registered Stock in 1946 ▲ Federation of Nigerian Development Loan Stock in 1946 ▲ Federal Republic of Nigeria Development Loan Stock in 1963 ▲ Suspended in 1988 ▲ Issuance rejuvenated in 2003 with 1st FGN Series ▲ Commencement of PDMM system in March 2006 ▲ Active secondary market commences in November 2006 ▲ Extension of the curve to 20 years in November 2008 The Current State of the Fixed Income Market in Nigeria ▲ The Fixed Income Market in Nigeria is made up of three major segments: Federal Government of Nigeria Bond, State Government Bond and Corporate Bond market. ▲ The Federal Government Debt Market is the largest and most developed of the segments The FGN Debt segments. Market dominates the fixed income Market in Nigeria. ▲ The amount of outstanding issuance in the Nigerian Debt Market is skewed towards Federal Government paper. The amount of FGN debt outstanding has increased from NGN1, 753 billion as at December 2006 to NGN3, 764 billion as at July 2010. NGN2,408 (63.97%) of the outstanding debt is FGN Bonds. ▲ Th FGN B d auctions are h ld under a Si l D h A i process. All bid are placed through the The Bond i held d Single Dutch Auction bids l d h h h twenty one primary dealers. ▲ The risk free benchmark yield curve was lengthened to a 20 year maturity in 2008 The primary dealers 20‐year 2008. also provide liquidity to the FGN Bonds by quoting two‐way prices in FGN Bonds in the secondary market. Outstanding Federal Government Debt Outstanding Federal Government Debt by Sector...
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...Fiscal Policy Fiscal Policy The United States’ deficit, surplus, and debt have had and are currently continuing to have a profound effect on the economy of this country. Although the federal government could play more of a role in boosting exports through tax reform and training assistance, some industries are staging a comeback on their own without help from Washington, because of improving marketplace trends. Taxpayers and Unemployed Individuals The United States' deficit, surplus, and debt have a very far-reaching effect on taxpayers and unemployed individuals. The immediate effect on taxpayers is as the deficit goes up and debt does as well the taxpayers are going to absorb the brunt of repayment. This will also indicate that as the deficit climbs and debt becomes larger that the dollar will become less valuable. The dollar losing value means that employers as well as consumers will have to be more careful with their money. The trade surplus has very little effect on the consumer because without a tariff in place on the outgoing goods it does not offer much if any of a return to the taxpayers. While the taxpayer and employers are watching every last dollar that makes it harder for the unemployed individual to get a job in his field. At this stage high quality jobs are harder to come by because employers have to make cuts to maintain pre-recession profits. Therefore, unemployed workers are forced to stay on unemployment or try for jobs with lower skill qualifications...
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...and Medicare users. This is because the money that the government loans itself to try and cover a deficit, comes primarily from the Social Security Fund. However, as more people retire, they draw more Social Security funds than are replaced with payroll taxes. With less money in the Social Security Fund it will mean other programs, such as Medicare must be cut, taxes must be raised or Social Security benefits must be lowered. This will result in lower payments to future Social Security users. This could result in no increases and changing the way cost of living increases are calculated. The government could ultimately default on its Social Security obligations. Social Security can only spend what it receives in tax revenues and has accumulated in its trust from past surpluses and interest earnings (Mishel, 2010). Thus, a surplus would increase payments for future users. TAX PAYERS The higher the debt, the higher taxes will be for individuals. Since banks keep a close eye on the debt of the country, interest rates on loans, mortgages, and credit cards will increase for individuals ("How National Debt Affects You", 2011). Additionally, the government could allow the value of the dollar to decrease so it can repay its debt at a cheaper rate. Ultimately, a weak dollar means higher inflation for tax payers. When it comes to a surplus the government cannot just take the surplus and do with it anyway they wish. The government can only use the surplus in a several different ways....
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...and strong growth. What is Fiscal Policy? When the supply of money is economic constant, government expenditures must be financed by either taxes or borrowing. Fiscal policy involves the use of the government’s spending, taxing and borrowing policies. The government’s budget deficit is used to evaluate the direction of fiscal policy. When the government increases its spending and/or reduces taxes, this will shift the government budget toward a deficit. If the government runs a deficit, it will have to borrow funds to cover the excess of its spending relative to revenue. Larger budget deficits and increased borrowing are indicative of expansionary fiscal policy. In contrast, if the government reduces its spending and/or increases taxes, this would shift the budget toward a surplus. The budget surplus would reduce the government’s outstanding debt. Shifts toward budget surpluses and less borrowing are indicative of restrictive fiscal policy. It is important to note that a budget deficit is different from the national debt. A deficit occurs when government spending exceeds revenue over a year, quarter or month. A deficit will increase the size of the national debt. Put another way, the deficit adds to the outstanding stock of IOUs issued by the U.S. Government and not yet repaid. Conversely, a budget surplus will reduce the size of the national debt. A surplus permits the government to pay off some of the holders of the federal government’s IOUs. These holders are the bondholders...
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...than three years since the recession emerged, still the unemployment is through the roof and the economic growth is sluggish. Why? In order to shed a light on this problem, first we have to know where the billions have gone and how they have been used. There are three kinds of Keynesian stimulus packages (1) the government gives money to people directly, in hopes that they would buy more stuffs and services. (2) The government directly buys goods and services (3) the government sends the check to state and local governments to spend it. In either one, the philosophy is that the increase in buying would result more activity and eventually will boost the economy. The 2008 stimulus was the first kind and the 2009 was almost a mix of all three. In 2008 the U.S Treasury started sending checks to households in the summer. It was supposed to put more money into the hands of people to buy additional goods and services and thereby stimulate production and jobs at the firms that produce those goods and services. It didn’t go anywhere. The consumer report in 2008 showed that consumption didn’t increase at all. Where has the money gone? Most of the money went to pay off some debt, some of it was saved and less than %25 was spent on goods and services. No surprise. Years ago, the well-known economist Milton Friedman (1966) explained that...
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...Axia College Material Appendix E Critical Analysis Forms Fill out one form for each source. Source 1 Title and Citation: Tax Cut for the Rich Should End | "Tax Cuts for the Rich Should End" by Chuck Marr and Gillian Brunet. Tax Reform. Noël, Merino, Ed. Opposing Viewpoints® Series. Greenhaven Press, 2011. Chuck Marr and Gillian Brunet, "High-Income Tax Cuts Should Expire on Schedule," Center on Budget and Policy Priorities, April 1, 2010. www.cbpp.org. Reproduced by permission | 1 | Identify the principal issue presented by the source. | The government wants to end the tax cut for rich people and small business owners. | 2 | Identify any examples of bias presented by the author. If none exist, explain how you determined this. | There are no examples of bias presented by the author. The premises support the conclusion. There is accurate information provided to show why the tax break should end. | 3 | Identify any areas that are vague or ambiguous. If none exist, explain how you determined this. | There are no areas of vague or ambiguous. The author provides accurate information that shows that the high income tax break should end. By allowing the rich families to be allowed a tax break is only making the economy worst. Rich families have the funding to pay taxes and should be not receiving a tax break. | 4 | Do you find the source credible? Explain your reasoning. | I do find this source credible because there is accurate information provided. That could...
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...The debt crisis of Nigeria and Greece Introduction National debt is a problem that can inflict any country including the developed countries. Almost all countries go into budget deficit one way or the other and end up borrowing money. The most direct effect of the government debt is to place a burden on future generations of taxpayers. When these debts and accumulated interest come due, future taxpayers will face a difficult choice. Inheriting such a large debt cannot help but lower the living standard of future generations. In the 1960s and 1970 some developing countries were encouraged to borrow money to service old debts and also to finance development projects in their country like infrastructure. This has been necessitated by the availability of huge oil earnings deposited by OPEC member countries and were eager to lend at very low rates. Moreover, it is misleading to view the effects of government debt in isolation. Government debt can be divided into two categories namely domestic debt and international debt. The International debt is facilitated by the formation of such institutions like the International Monetary Funds (IMF) the International Bank for Construction and Development (World Bank). Governments borrow money from the private sector and foreign governments if they can't pay for all their spending with taxes and government revenues. A government will issue bonds at bond auctions every so often and market participants will come in and bid for them. Market participants...
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......................................................... I . I1 . 3 4 10 10 11 13 14 14 17 19 THE GLOBAL AGENDA .......................................................................................... PROGRESS IN THE IFA AGENDA ....................................................................... The Financial Sector Assessment Program (FSAP) ............................................. The Reports on the Observance o f Standards and Codes (ROSC) ....................... The Financial Sector Reform and Strengthening Initiative (FIRST) .................... The Financial Sector Reform and Strengthening Initiative (FIRST) .................... Combating Money Laundering and Terrorist Financing (AML/CFT) ................. Debt Sustainability & Debt Management ............................................................. Social Protection................................................................................................... A. B. C. C. D. E. F. ANNEX Accounting and Auditing ........................................................................................... Corporate Governance ............................................................................................. Insolvency and Creditor Rights ................................................................................ 22 28 33 2 INTRODUCTION 1. In response to major financial crises in the 1990s, the international community embarked o n a range o f initiatives to help prevent...
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