15 Jul 2023 6:11 am
The Bottom Line ......... tax cuts reduce government revenues and create either a budget deficit or increased sovereign debt.
A budget deficit occurs when money going out (spending ) exceeds money coming in (revenue ) during a defined period. Thus each time congress approves preferential tax cuts and tax dollar subsidies the USA is creating a budget deficit.
Sovereign debt is issued by a country's government to borrow money. Sovereign debt is also known as government debt, public debt, and national debt. Governments borrow for a variety of reasons, from financing public investments to boosting employment.
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it will not pay (or only partially pay) its debts (repudiation), or it may be unannounced.
A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments.
A budget deficit occurs when money going out (spending ) exceeds money coming in (revenue ) during a defined period. Thus each time congress approves preferential tax cuts and tax dollar subsidies the USA is creating a budget deficit.
Sovereign debt is issued by a country's government to borrow money. Sovereign debt is also known as government debt, public debt, and national debt. Governments borrow for a variety of reasons, from financing public investments to boosting employment.
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it will not pay (or only partially pay) its debts (repudiation), or it may be unannounced.
A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments.