Spending Cuts
Canada faced a nearly double-digit budget deficit in the 1990s. By instituting deep budget cuts (20% or more within four years), the nation reduced its budget deficit to zero within three years and cut its public debt by one-third within five years. The country did this without raising taxes.
It has been a hot debate all over Uganda. Government claims that there can't be development without burrowing.
Bailout
Getting rich nations to forgive the debts or hand you cash is a strategy that has been employed more than a few times.
Interest Rate Manipulation
Maintaining low-interest rates is another way governments seek to stimulate the economy, generate tax revenue and, ultimately, reduce the national debt.
(1) Avoid war/reduce military spending. The striking feature of UK national debt history is the impact of war on causing an explosion in debt. ...
(2) Raise pension age. One of the simplest ways to reduce government spending would be to raise the retirement age. ...
(3) Broaden the tax base. ...
(4) Debt ceilings. ...
Economic growth. ...
Land value tax.
Interest Rate Manipulation
Maintaining low-interest rates is another way governments seek to stimulate the economy, generate tax revenue and, ultimately, reduce the national debt. Low-interest rates make it easy for individuals and businesses to borrow money. In turn, the borrowers spend that money on goods and services, which creates jobs and tax revenues.
Spending Cuts
Canada faced a nearly double-digit budget deficit in the 1990s. By instituting deep budget cuts (20% or more within four years), the nation reduced its budget deficit to zero within three years and cut its public debt by one-third within five years. The country did this without raising taxes.
Raise Taxes
Tax increases are a common tactic. Despite the frequency of the practice, most nations face large and growing debts. It is likely that this is largely due to the failure to cut spending. When cash flows increase and spending continues to rise, the increased revenues make little difference to the overall debt level.
Bonds
Take, for example, the issuance of government debt. Governments often issue bonds to get money. This enables them to avoid raising taxes and provides money to stimulate the economy through public spending, theoretically generating additional tax income from prosperous businesses and taxpayers.
Currency depreciation may increase debt denominated in foreign currency
Victorian Britain had huge national debt, the price paid for creating public infrastructure and sustaining economic growth/that debt was manipulated by a number of economic devices. Natural resources may and will balance the growth of debt or developing and sustaining technical expertise as the Japanese did after the 2nd world war with the financial aid of the USA. Although the economic devices here are good, creating a viable business model based on specialisation and creativity is better.
In fact at present a number of areas tradionally undeveloped/such as Africa/are now developing their businesses and infrastructure and by so doing, creating increasing wealth. This was the route of China. Achieving wealth increase is a product of the economic, business restructuring and the creation of public infrastructure. Once war and politics are suppressed, internal stability is obtained, wealth can follow.
Yes avoiding war/ reduce military spending could perhaps lessen national debt. But is war really evitable? The debate continues...
If debt is associated with establishing projects- building human capital it would be a good tool for an economic reform
Nirmala S.V.S.G
You say "Here are 10 examples...." yet you give only 4. Why? Because you are mindlessly copy-and-pasting your answers from websites and you are doing so without acknowledging the source. That is plagiarism and you are doing that many times on RG. Here is the missing citation:https://www.sanders.senate.gov/top10
Surely, by fixing on debt and raising taxes or cutting spending a state risks economic downturn as occurred in the UK, with incomes effectively lowered and less to spend. This seemed to me likely to cause long term problems.
Even though there is no magic solution for a reduction of a national debt; however, a country should follow the below instructions:
1. Reduction in the size of government's institutions. The government's size should be within the acceptable international benchmark,
2. Reduction in the government's recurrent budget,
3. Lifting up unnecessary subsidies,
4. Reduction in military and security expenses,
5. The government should be more efficient in collecting different taxes and fees,
6. Avoid adding or increasing taxes if the economy in recession,
7. Increase the GDP by having an attractive environment for business to start and grow. This will lead eventually to the increase in government's revenue.
The issue of the debt is becoming crucial, especially in developing countries. The ability to sustain public debt is very hard to achieve and government must make great effort to be able to ensure fiscal sustainability over a long period of time. Concerning the ways to reduce, or at least stabilize the level of the public debt, I can think of several ways: Invest the debt in more productive projects in order to be able to service the debt Reduce public expenditures Enlarge tax base Reduce the share of foreign currency denominated debt to avoid the risks related to exchange rate fluctuation Rely more on long term debt because this allows more visibility for the government
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