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Free National Debt Reduction Strategies Essay Sample
All the money a government borrows from an outside source is usually referred to as national debt. All the lower and upper levels of any government have debts. The debts are then put together and the aggregate is usually referred to as the total national debt.
There are two types of debts namely internal and external. The internal debts are those that are borrowed from within the country by either selling of securities or bonds. External debts are those total amounts of money or goods that have been borrowed from outside the country or the IMF.
Areas to cut spending
The most important factor to be considered in every country is the issue of reducing national debt. National debt can be reduced by cutting costs on some services that are provided. The costs associated with politics should be cut down considerably. This is because cutting down the costs of politics will not ruin any basics providence of the citizens in the country in the future days.
Politics take a very large amount of money in many countries, which can be directed to other social amenities that are important to the people. The reason for borrowing is always done when the government is planning to spend more or the income of the country is forecasted to be low. Every government at some point requires assistance to meet it budgetary needs. For the any government to be able to run its day-to-day activities it needs to collect tax and provide services for its citizens.
The major problem of relying to loans very much is that the future income will be directed to paying the loans instead of doing other development projects. If the country is not able to repay its loans, many of them resort to selling of its assets or increasing its taxes.
