Deficit-covering bond
The government bonds which are published to make up for the fiscal deficit of the country with the deficit-covering bond (when I release a deficit). I say the exempt bond.
Table of contents
Summary
Finance Act Article 4 provides, "the annual expenditure of the country must assume it the resources with a public loan or the annual revenue except the borrowed money." and, as a general rule, prohibits government bond issuance. The proviso of Finance Act Article 4 provides, "I publish a public loan within the amount of money that passed through a decision of the Diet about the resources of public-works spending, the investment and the loan or I can make borrowed money" and recognizes the publication of the construction bond exceptionally.
However, the exempt public bond method only for one year in acknowledgment of the publication of the deficit-covering bond was established by a revised budget of 1965, and a deficit-covering bond was published for the first time after a war. There was not the publication of the deficit-covering bond for ten years, but it was published again in 1975, and after that I continued an exception enactment until 1989, and a deficit-covering bond was published afterwards.
The amount of publication of the deficit-covering bond except the temporarily special public loan of the year becomes zero in 1990, and 1994 is published again, and it reaches 1993 afterwards although amount of publication zero continues.
Difference with the construction bond
Daiwa Institute of Research points out, "a problem is bigger than a construction bond as for the deficit-covering bond in a point that the constant role should accept the deficit-covering bond and corrects it because it is not realistic to increase taxes to let finance balance at the time of recession and balances, and there are not assets" [1].
Financial finance by the central bank
The central bank which is the only issuing bank publishes paper money newly and can make up for deficit financing of the government. For example, I purchase US Treasury of 1,660 billion dollars as of July, 2012, and FRB which is the American central bank becomes the greatest buyer of the US Treasury [2].
You should bring back economy by letting a government office reprints paper money as for Joseph Stiglitz or Paul Krugman [3] (each Nobel Prize in Economic Sciences prize winner), and government spending spread and, about Japan, discuss it with [4] [5]. If people have money printed newly, demand will be roused by a disposable income rise to be going to turn money to the consumption of a fortune and the service, and, as for the drop of real interest rates, the financial institution including the bank can increase rental, and the effect of the economy raise is expected. The upswing in expectation of the inflation by the paper money reprint gives a benefit to economy in form called the improvement of the employment (Phillips curve). Such a currency publication gain (シニョリッジ) discussion is a talk about the paper money which a government office publishes namely the bill issued by the government, but it is a similar effect even if I had the government publishes interest-free government bonds, and the Bank of Japan buy it. As a trump of the Japanese economy to suffer from recession to continue after a bubble burst for a long time in the 1990s, a discussion is pushed forward from the viewpoint of reflation.
Footnote
- "Look at ^ Daiwa Institute of Research structure - of the guide economy of the latest guide;, in Japan business publishing company, fourth edition, 2002 that read it, and know", is 143 pages.
- ^ China raises treasury holdings first time in three months Bloomberg July 18, 2012
- Is it ^ Paul Krugman"What's wrong with Japan? "The Official Paul Krugman Web Page
- ^ Lessons from Japan's economic malaise Joseph Stiglitz, Project Syndicate March 12, 2003
- As for ^ duty, foreign exchange, as for council foreign exchange, it is the specialized sectional meeting (the fourth) minutes about the trend of the international finance of subcommittee these days
Allied item
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