Government"s national debt is the talk of the town presently
. Lately the amount of debt on government has increased to a great extent. Most of the people do not understand why the debt is growing day by day. The debt keeps climbing for several reasons; it is also the same reasons your high personal debt.
High deficit is considered to be the biggest debt problem, its called deficit when you spend more than your income. It similar to what happens in our houses; you will have more bills to clear than your pay check. When you fall short you tend borrow money and that borrowed money is called debt. This way government year by year borrows money from other countries and world bank to equal cover their expenses.
Whenever a person or government borrows money that money comes with an interest and this interest will increase the debt. If interest is left unpaid for year together the debt will become larger. As an individual we sometimes struggle to spend for small unplanned expenses, but remember what happens when this runs to billions for governments.
Nowadays we need extra money for all the issues because some social accountability leads you to more than what you planned. People need much higher cost than what they need. These goes to debt account.
Another major reason that contributes to the debt is when the income falls shorter than expected. Say when the government has planned certain number on tax collection, but when they fall short on these numbers governments go for debt.
One of the toughest tasks in this world is running the government. To properly run the government the officials in the government should be very good at debt management
. In these modern uncertain times one should know how to plan things and manage debt.