Concept
Internal debt owed by a government (money a government borrows from its citizens) is part of the country's national debt. It is a form of fiat creation of money, in which the government obtains cash not by printing it, but by borrowing it. The money created is in the form of treasury securities or securities borrowed from the central bank.
These may be traded but will only rarely be spent on goods and services. In this way, the expected increase in inflation due to the increase in national wealth is lower than if the government had simply printed the money and increased the more liquid forms of wealth (i.e., the money supply).
Read more about this topic: Internal Debt
Famous quotes containing the word concept:
“Obscenity is a moral concept in the verbal arsenal of the Establishment, which abuses the term by applying it, not to expressions of its own morality, but to those of another.”
—Herbert Marcuse (1898–1979)
“Behind the concept of woman’s strangeness is the idea that a woman may do anything: she is below society, not bound by its law, unpredictable; an attribute given to every member of the league of the unfortunate.”
—Christina Stead (1902–1983)
“To find the length of an object, we have to perform certain
physical operations. The concept of length is therefore fixed when the operations by which length is measured are fixed: that is, the concept of length involves as much as and nothing more than the set of operations by which length is determined.”
—Percy W. Bridgman (1882–1961)