PFM Board

The Performance Dimensions in Budget => What makes a budget credible? => Topic started by: STONE on November 05, 2011, 20:27:18 GMT

Title: Budget Credibility and Debt Service
Post by: STONE on November 05, 2011, 20:27:18 GMT

Interesting times we live in.  The eurozone is grappling with many issues: but wasn't there a basic point that was missed - a credible budget begins with some basic calculations of what has to be paid first and foremost - interest and debt.  If that is not calculated properly and transparently how can any budget be credible?  Isn't the basic question is the deficit more or less than 3 per cent of GDP and what does this year's deficit contribute to keeping debt below or getting it back to 60 per cent of GDP?

Title: Re: Budget Credibility and Debt Service
Post by: Martin Johnson on November 30, 2011, 22:31:32 GMT

You are forgetting the Golden Rule Simon ... make sure you get re-elected!

Title: Re: Budget Credibility and Debt Service
Post by: STONE on December 01, 2011, 04:11:23 GMT

Ah yes indeed the Golden Rule don't borrow for recurrent expenditure purposes - now would expenditure to be "re"-elected be recurrent or not?  Does it have to recur each year or only every 4 or five years?