Talk:Public sector borrowing requirement
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Someone can help here... So far as I understand it, the PSBR is an increase in national debt for the current year. If the government kept recognisable accounts (e.g. P&L and Balance sheet etc) this would be the Financing required to keep the organisation solvent. i.e. money needed to be raised by debt or a rights issue. Its only a 'requirement' in so far as there is a negative cash flow. Moreover, if gilts are essentially a mortgage on the country, then it is rather like mortgaging your house to pay for school fees, health costs, a new car, and general living.—The preceding unsigned comment was added by 155.198.220.193 (talk • contribs) .
- I guess I don't quite understand what your question is. PSBR does not refer to the increase in national debt as a whole; it is the public sector deficit only (i.e., the difference between public sector expenditures and public sector revenue), and, correspondingly, the borrowing that is required (hence the word requirement in PSBR; and yes, if there were a surplus, then no borrowing would be required) to cover this difference. As for the mortage example, it's a bit on the emotional side, but the underlying idea is correct. The difference is that if you (an individual) default on your mortgage, your only way out is through declaring bancrupcy; but it is very unlikely (although possible) that the government is going to default over PSBR—they can always issue more gilts to fulfil pending obligations (which, incidentally, is one of the reasons why government bonds are considered risk-free).
- Hope this answers your question, or at least provides some explanation. Please restate your question if this is not what you needed.—Ëzhiki (ërinacëus amurënsis) 15:01, 14 March 2006 (UTC)
