Definitions

national-debt

national debt

or public debt

Total indebtedness of a government, especially as evidenced by securities issued to investors. The national debt grows whenever the government operates a budget deficit—that is, when government spending exceeds government revenues in a year. To finance its debt, the government can issue securities such as bonds or treasury bills. The level of national debt varies from country to country, from less than 10percnt of the gross domestic product (GDP) to more than double it. Public borrowing is thought to have an inflationary effect on the economy and thus is often used during recessions to stimulate consumption, investment, and employment. Seealso deficit financing; John Maynard Keynes.

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The Swedish National Debt Office or Riksgäldskontoret founded by the Riksdag of the Estates in 1789, is a Government agency in Sweden. The first task of the Debt office was to finance the War against Russia started by King Gustav III.

The method of raising funds was to issue promisory notes called Riksgälds denominated in Riksdaler which was the Swedish currency at the time. The reason why the funds couldn't be raised through the Riksbank was that its notes had to be backed by Silver (commodity money) to two thirds, while no such restrictions applied for the promissory notes (credit money) issued by the Debt office. This produced a heavy seigniorage induced inflation, where the exchange rate, for the promissory notes against Silver, was 1 to 4 in 1834.

In 1989, after two hundred years as one of the few agencies that reported directly to the Riksdag, the Debt office was reconstituted and is now reporting to the Ministry of Finance and the Cabinet. After 1989 it also assumed the role as the Government internal bank from the Riksbank.

Since January 1, 2008 the Debt office handles the Swedish deposit insurance, which 1996-2007 was handled by a separate governmental agency.

Since 2004, the Swedish National Debt Office is headed by Bo Lundgren.

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