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Definition: public debt from Collins English Dictionary

n chiefly US

1 the total financial obligations incurred by all governmental bodies of a nation

2 another name for national debt

Summary Article: national debt
From The Hutchinson Unabridged Encyclopedia with Atlas and Weather Guide

Debt incurred by the central government of a country to its own people and institutions and also to overseas creditors. A government can borrow from the public by means of selling interest-bearing bonds, for example, or from abroad. Traditionally, a major cause of national debt was the cost of war but in recent decades governments have borrowed heavily in order to finance development or nationalization, to support an ailing currency, or to avoid raising taxes.

National budgets may be planned with a deficit (shortfall) that is funded by overseas borrowing, but generally most governments adopt monetary policies designed to limit their borrowing requirements, both to reduce the cost of servicing the debt (paying off the interest), and because borrowing money tends to cause inflation.

The national debt is managed by the Bank of England, under the control of the Treasury. Historically, the first issue of government stock in Britain was made in 1693, to raise a loan of £1 million. Increases of the national debt have been caused by wartime expenditure. For example, after the War of the Spanish Succession 1701–14 it reached £54 million. World War I forced it up, by 1920, to £7,800 million and World War II, by 1945, to £21,870 million.

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