The national debt is the whole of future financial liabilities in the forms of loans on behalf of the State, the communities and the organizations which depend on it directly (state enterprises, social security…). The exact delimitation of the national debt, in particular the accounting of the retirements is not the consensus object (see will infra ).

One distinguishes the Domestic debt, held by the Economic agents Résident S of the transmitting State and the Foreign debt, held by foreign lenders.

The debt generally takes the form of Government loans, though the least reliable countries with the glance them financial markets can have recourse to the commercial Banque S or international institutions (the World Bank, Fonds international currency, District banks of development).

One also distinguishes the debt from short term (one year or less), in the medium term (up to ten years) and long-term (beyond ten years).

Delimitation

According to the European standard of National accounting (SEC 95), the national debt is the whole of the financial liabilities contracted by the Public administrations, themselves definite like

This definition does not settle the question of knowing if the debt must integrate the potential future loads, like the retirements of the public agents. Indeed, contrary to the debt related to the loans, the future amount of the loads on the budget of the State related to these engagements are not known with certainty. Moreover, the State preserves the possibility of not keeping to its commitments, or of obtaining modifications (for example: to lengthen the working life to profit from a pension), by negotiation or unilaterally.

A load of this type, whose occurred, the expiration date or the amount is known little about, must normally treat of accountancy by the constitution of a Provision. Thus, starting from the end of the year 1990, the tendency was to partly enter these conditional credits under the contingent liabilities.

Variation of the national debt

See also: Public deficit

The national debt is related on the Public deficit, or the Budget surplus, but it of it is quite distinct.

The public deficit increases the national debt in value. If the public deficit expressed as a percentage of GDP exceeds the Growth rate GDP, then the national debt increases expressed as a percentage GDP .

The monetary Création can be a means for the public power of filling its debt - it is said whereas it uses “the board with tickets”; this financing, convenient, is done at the expense of the value of the Monnaie in circulation: more currency for a given quantity of Production increases the Inflation and steals the Economic agents (mainly households) which have currency.

This technique is not used any more in the developed Pays since of the decades, where the management of the currency is entrusted to a Central bank independent or nearly independent.

Of course, the central bank could in its turn carry out the monetary emission to finance the purchase of the loans of the public power; the economic effect is then similar to the direct emission by the State, except for the transparency. In France (and in the other countries) this practice is prohibited since decades (prohibition made with the Banque de France buy Treasury bonds).

To know if the deficit increases or is reduced is important in terms of piloting of the Public finances, but a deficit remains a deficit, even if it is weaker than the year of before: the debt continues to increase (simply a little less quickly) if the budget is overdrawn, and with it loads of refunding (capital and interest), with less than one fall of the Interest rate. Thus, the debt can increase in volume whereas refundings decrease if interest rates are strongly reduced, as it is the case since the beginning of the Années 1990.

Level by country

See also: List of country by national debt

Source: AFT, Bulletin n° 209 - October 2007, page 8

In France

See also: national Debt of France

In France, since 1980, the national debt increased to reach 62.4% of the GDP at the 2006. Its evolution is more worrying than that of the adjoining countries, because the public deficit is only used to finance current expenditure. Like the other countries of the Euro area, France must respect the Critères of Maastricht.

In Canada

The Canada is often presented in model of a successful Réforme of the State and of a rigorous management of its national debt.

After a point of the federal debt of Canada with 68,4% of the GDP in 1994, the debt fell down to 38,7% in 2004, following a series of budget surpluses due to a policy of rigorous management of the State (Austerity measure cf ), inspired by the principles of the Economic liberalism: simultaneously with the fall of the deficit, the share of the federal public expenditure in the GDP passed from 19% to 12%, the total public expenditure lowering approximately 10% between 1992 and 2004.

The official objective is to go down to 25% from the GDP about 2015 and even front, to face the ageing of the population.

Canada has a federal structure, with autonomous budgets at various levels. By incorporating the whole, of the federation to the communes, one observes a quasi-stability, since the clear debt according to the new definition of 2002 then passed from 800 billion in 2001 to 791 billion in 2005. The provinces are overall, like the federal level, in primary education surplus, on the other hand the communes are involved in debt more and more.

Since the deficit was eliminated in 1997, Ottawa was able to refund 95,6 billion dollars of the accumulated debt (Lapresse Newspaper of the 28 sep 2007).