Written by Louise Maheo

WHAT ARE WE TALKING ABOUT?

Humans are social beings and have learned to live in societies for thousands of years. A group is a numerical advantage in times when predators much bigger than a human beings were a danger to the human species. Over the years, humans have been able to rise to the top of the food chain and build a powerful society. At the national level, a society is not autonomous, insofar as it depends on countries for its trade and its politics. Humans have made their society an autonomous, global construction, even though, on a planetary scale, we consume more resources than the earth can produce.

WHAT IS PUBLIC DEBT?

Public debt works in the same way people extract resources without contributing and become dependent on an expensive and unproductive system. It is an accumulation of current expenditure not covered by covered by revenues. Public debt is usually explained as a percentage of gross domestic product (GDP). Using this name allows the debt to be compared to the size of each country's economy, and it also facilitates international comparisons between countries.

DO WE REALLY KNOW WHEN PUBLIC DEBT STARTED?

We asked William Thomson, the founder of Virtual Event Campus, who is studying in a MSc in the Green Economy.

With this testimony, we can see that over the years, debt has not developed in the same way, it is not the same as before. Money has also changed its status, since everything is virtual and our bank accounts are just numbers.

WHAT FACTORS ENCOURAGE PUBLIC DEBT?

CAN THE PUBLIC DEBT BE REPAID?

BUDGET SURPLUS

The opposite of this situation would be a budget surplus boom, as people generate wealth and consume resources while contributing and becoming active, independent citizens. This situation could be compared to the highest point of efficiency in both demand and supply: everything is optimized.

Community Surplus

HOW CAN THE BUDGET SURPLUS BE OPTIMIZED?

Theoretically, buyers buy at the highest price, and sellers at the lowest price. Thus, buyers and sellers optimize their activities. The budget surplus is obtained by adding the consumer surplus and the producer surplus. These are the surpluses that form the laws of the market. The surplus is a measure of the gains from the exchange, i.e. the advantage drawn by the participants (producers or consumers). Therefore, the higher the surplus, the higher the gains from exchange.

To conclude, although it seemed legitimate and normal to ask those who benefited from these current expenses to finance them through a "refundable credit," it was not successful. Since COVID-19 crisis, most countries have seen their public debt increase, being obliged to borrow from the financial market to repay their debt. The “perfect” solution would be to encourage companies to participate in the budget surplus boom because it would encourage markets and the result would be increased state flexibility, reduced interest costs and the ability to invest in future growth.

*Thank you for reading this article! If you would like to contribute your thoughts, pictures or videos to this article or believe you have found mistakes and/or misinformation, please contact us and tell us about it by clicking on the button next to this text, so we can take your feedback into consideration.