State and Local Debt, Essay Example

In earlier times, it was so unimaginable how a nation would be having debts, more especially a super power nation. However, this paper brought a full understanding of how a nation wound end up borrowing. I understood the complete explanation of the root cause of the debts. There was a recession spanning from December 2007 to June 2009. This brought in a financial crisis in that:

• There was increased congressional interest in financial health
• Local and state taxes declined
• There was an increase in expenditures

These three reasons, among others contributed to government borrowing, and with time, the debts increased. The classification of debts in the assignment reading; whether long term or short term did not matter a lot as all of them are debts, subjected to refunding.

There is discussion of various cases: the New York City Financial Crisis, the Washington State Public Power Supply System, the Orange County, California, and the Government Financial Emergencies. These cases are so practical and they enable government economists to look back, reflect, and from these cases, learn the future lessons. They form a strong foundation to predetermine the future economic position of a nation.

It is so definite that whatever that brings in debts are issues to do with budgeting. A budget is a detailed financial plan of a nation. Experienced government economists are responsible to do the budgeting. An operating plan budget focuses on the day-to-day running of the state or nation for a period of one-year. In through the entire year, economists review the budget while making any adjustments. On the other hand, there is the capital budget which is a long long-term budgetary of about 10 years with annual updates. As per my understanding, I conclude that state economist ought to bond and choose the most efficient budget plan that works efficiently to avoid cases of government burdens that calls for borrowing.