What Is Fiscal Debt?

by Gavin Fletcher; Updated September 26, 2017
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Fiscal debt, as opposed to ordinary debt, is a phrase normally associated with a government's fiscal balance. Fiscal debt and fiscal deficit are related and sometimes used interchangeably when discussing the financial standing of a government.

Basics

According to Investopedia.com, fiscal debt is the accumulation of a government's fiscal deficits over time. The fiscal debt is the total amount a government owes to creditors.

Misconceptions

Debt and deficit are not the same even though many people use the terms interchangeably. A fiscal deficit occurs when a government's expenditures are more than the revenue generated. This occurrence is typically limited to time frames, such as a quarterly fiscal deficit or a yearly fiscal deficit. Fiscal debt is all the debt regardless of time frame.

Opinions

While long-lasting fiscal debt may have a negative effect on economic factors such as inflation and the value of the dollar, some economists believe that a fiscal deficit can help bring a country out of a recession. This was the belief of the late John Maynard Keynes.

About the Author

Marky Mark began writing professionally in 2006. His articles have appeared on news sites such as GBMNews.com and Blackpower.com. He holds a Bachelor of Arts in English from Vanderbilt University and has been teaching 9th grade English since 2007.

Photo Credits

  • debt defined image by Christopher Walker from Fotolia.com