Debt Crisis

Debt crisis

A debt crisis is a situation in which a government loses the ability of paying back its governmental debt. When the expenditures of a government are more than its tax revenues for a prolonged period, the government may enter into a debt crisis. Various forms of governments finance their expenditures primarily by raising money through taxation. When tax revenues are insufficient, the government can make up the difference by issuing debt. A debt crisis can also refer to a general term for a proliferation of massive public debt relative to tax revenues, especially in reference to Latin American countries during the 1980s, the United States and the European Union since the mid-2000s, and the Chinese debt crises of 2015. The development charity CAFOD states that in current conditions, more than 50 countries are in debt crisis.

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• Related Topics:  Debt - Debt Is An Obligation That Requires One Party, The Debtor, To Pay Money Borrowed Or Otherwise Withheld From Another Party, The Creditor. Debt May Be Owed By A Sovereign State Or Country, Local Government, Company, Or An Individual., Debt Of Developing Countries - The Debt Of Developing Countries Usually Refers To The External Debt Incurred By Governments Of Developing Countries. There Have Been Several Historical Episodes Of Governments Of Developing Countries Borrowing In Quantities Beyond Their Ability To Repay., Global Debt - Global Debt Refers To The Total Amount Of Money Owed By All Sectors, Including Governments, Businesses, And Households Worldwide. As Of 2022, Global Debt Was The Equivalent Of 305 Trillion Usd. This Includes Debt By Both Public And Private Debtors., Government Debt - A Country's Gross Government Debt Is The Financial Liabilities Of The Government Sector. Changes In Government Debt Over Time Reflect Primarily Borrowing Due To Past Government Deficits. A Deficit Occurs When A Government's Expenditures Exceed Revenues., Monetary Sovereignty - Monetary Sovereignty Is The Power Of The State To Exercise Exclusive Legal Control Over Its Currency And Monetary Policy. This Includes The Authority To Designate A Country's Legal Tender, Control The Money Supply, Set Interest Rates, And Regulate Financial Institutions., Odious Debt - In International Law, Odious Debt, Also Known As Illegitimate Debt, Is A Legal Theory That Says That The National Debt Incurred By A Despotic Regime Should Not Be Enforceable., Government Debt, Financial Crises