The causes and consequences of the budget deficit. The state budget. Fiscal deficit and public debt

To fulfill its functions in the political, economic and social spheres, the state represented by the authorities different levels forms and uses funds money... The largest monetary fund at his disposal is the state budget... This is an annual plan (list) of government expenditures and sources of their coverage - revenues. Their composition is determined by the country's economic potential, the role of the state in the economy, and the state of the country's international relations. The accumulation of significant funds in the budgetary system creates an opportunity to ensure uniform development of the economy and socio-cultural sphere throughout the country. The presence of a budget creates an opportunity for maneuvering in the distribution of funds for the needs of society, taking into account their priority over a certain period of time.

There is also a broader definition of the state budget as the most important link in its financial system. The state budget Is an economic category of the country's financial system, reflecting monetary relations that arise between the state, on the one hand, and enterprises, organizations, institutions of all forms of ownership and individuals, on the other, regarding the formation of a centralized fund of state funds and its use for an extended reproduction, raising the standard of living and meeting other social needs.

The budget mediates over 70% of all financial relations and brings together different financial institutions, with the help of which the state carries out its financial activities and redistributes a significant share of the social product.

Almost 80% of the revenues of state budgets in developed countries are provided by taxes.

State budget revenues:

1) tax revenues;

2) non-tax revenues - income from property and state entrepreneurship, administrative fees, fines;

3) subventions - interbudgetary transfers for use for a specific purpose;

4) income from capital transactions - interest payments on loans (the state is the creditor).

In Ukraine, the main sources of revenue for the State budget are four taxes - value added tax (VAT), income tax, excise tax, and income tax.

State budget expenditures:

1) government services - maintenance of central authorities, public security, legal proceedings and national defense, social and cultural needs, science and education, health care;

2) financing of the national economy (subsidies, grants);

3) financing of local budgets (subventions);

4) payment of public debt.

The composition of expenses is determined by the functions of the state and the needs of society at each stage of its development. According to the Budget Code of Ukraine, they are divided into operating expenses and development expenses (investment).

Structure budgetary system, uniting all the budgets of the country on common principles, depends on the state structure (unitarity or federation). The sum of all budgets of the country (local - regional and city - and state) is consolidated budget.

The principles of distribution of income and expenses between budgets of different levels are determined by the Law of Ukraine "On the budgetary system of Ukraine". The distribution of funds between the budgets of different levels is carried out every year in a new way during the approval of the state budget.

The difference between the revenues and expenditures of the budget - budgetary balance... If it is positive, it means surplus (surplus) of the budget if negative then budget deficit .

An increase in government spending with a decrease in taxes, although it prevents a drop in production, increases the deficit of the state budget and creates preconditions for intensifying inflationary processes.

Budget deficit - the amount of excess government spending over its revenues in each this year... The main reasons for its occurrence: a decline in social production and an increase in its costs, an inflationary money supply, an increase in funding for social programs, an increase in the cost of maintaining the military-industrial complex, the growing scale of the shadow economy, i.e. in a general sense - decrease tax base and growth in government spending. Active deficit arises under stimulating fiscal policy, passive deficit - with a decrease in government revenues as a result of a fall economic activity.

By itself, the budget deficit cannot be negative for the economy and the dynamics of the living standards of the population: economically developed countries have a budget deficit (10-30%). It all depends on the reasons for its occurrence and the direction of spending budget funds (if they are used to develop the economy, then in the future this will result in an increase in production; if they are used ineffectively, then this will lead to an increase in inflationary processes).

There are two concepts of balancing the state budget. Cyclically balanced budget characterized by the equality of the volumes of government spending and tax revenues within business cycle... It can be used to reduce unemployment and overcome depression (recession). At the same time, budget surpluses in the recovery phase cover the increase in public debt during the recession. To counter the economic downturn, it is necessary to lower taxes and increase government spending - this leads to a budget deficit. As a result of the next inflationary recovery, the economy will raise taxes and reduce government spending.

If the government in conducting economic policy sought to have balanced budget annually - equality of the volumes of government spending and tax revenues within a year - this would only intensify market fluctuations, reducing the efficiency of fiscal policy (the balanced budget multiplier is equal to 1, see formula (8.3)). During the crisis and depression due to a decrease in production volumes, budget revenues are reduced. A corresponding decrease in government spending at this time will delay the recovery of the economy from the crisis. On the other hand, the full expenditure of increased budget revenues in the recovery phase can also negatively affect the state of the economy ("overheating" of the economy).

Since the ups and downs in the national economy are not the same both in duration and in amplitude, a cyclically balanced budget is incompatible with fiscal policy. Therefore, the imbalance of the state budget and the presence of public debt can be viewed as inevitable consequences of this policy. At the same time, this policy, while promoting growth national income during a recession and by containing income growth in the boom phase, helps to balance the budget.

When analyzing the interdependence between the fiscal policy of the state and the state of its budget, two components of the budget deficit are distinguished - structural and cyclical deficits. They are considered in conjunction with the so-called “full employment budget”.

Full time budget - the ratio of government revenues and expenditures, which would have developed if the economy had developed during the year with full employment.

Using the full employment budget, it is possible to differentiate the impact of discretionary and non-discretionary policies on the state budget and thereby assess the quality of fiscal policy.

Structural deficiency - the difference between current government spending and those budget revenues that would have entered it in full employment under the existing taxation system. Those. if the economy has reached the production level at full employment, and tax revenues are less than government spending, then the resulting deficit is structural.

Cyclic deficit - the difference between the actual deficit and the structural deficit. It is caused by the downturn in business activity and the associated decline in tax revenues. Those. the actual deficit during a downturn is greater and during a boom there is less structural deficit. In general, cyclical deficits are the result of government fiscal inaction.

It can be argued that structural deficit is a consequence of discretionary fiscal policy of fiscal expansion, and cyclic is the result of the built-in stabilizers.

However, it is impossible to judge by the size of the budget deficit how actively the government is pursuing fiscal policy.

The relationship between the budget deficit and fiscal policy can be summarized in two theses:

1. During economic downturn morebudgetary deficit she will be accompanied.

In a three-sectoral economy, the total income earned by households is used by them to pay taxes, consumer spending and savings:

Y \u003d C + S + T

In equilibrium conditions, total income is equal to the amount of planned expenses:

Y \u003d C + I + G

C + S + T \u003d C + I + G

S \u003d I + (G - T) \u003d I + State budget deficit

In the presence of a state budget deficit, to finance it, the government borrows funds from the same source as private entrepreneurs - from household savings. Therefore, all additional savings resulting from growth total income when pursuing a stimulating fiscal policy, they will go to pay for the resulting budget deficit, instead of being aimed at expanding the investment activity of the private sector.

2. During economic recovery fiscal policy will be the more effective the more budgetary surplus she will be accompanied.

In a period of economic recovery, fiscal policy is reduced to an increase in revenues and a decrease in government spending. In this case, a budget surplus is formed, which can be further used.

The stimulating effect of the budget deficit on the economy will depend on the methods of financing it. Similarly, given the amount of budget surplus, its impact on the economy depends on how it will be eliminated.

Using the budget surplus happens in two directions:

1) use to pay off debts... By buying back its debt obligations (securities), the government transfers the surplus proceeds back to the money market, which causes the interest rate to fall and thereby stimulates investment and consumption. But this can cause an increase in inflation;

2) withdrawal from circulationby suspending further use of these amounts. If surplus receipts are not returned to the economy, they do not create an inflationary impact.

Therefore, government savings (budget surplus) can be used either to cover government debt (∆N), or to reduce the money supply (∆M):

This expression is called identity of the state budget... Therefore, if there is a budget deficit, then it can be financed by issuing money or bonds:

, (8.6)

In the presence of a budget deficit due to its negative impact on the macroeconomic situation, the state is obliged to choose the most optimal sources of its coverage (methods of financing). The world uses two method of covering the budget deficit – non-issue (debt) and issue.

Most effective non-emission (debt) method , with the help of which it is possible to get rid of the deficit without additional issue of money into circulation, stimulating inflation. It consists in attracting external and internal sources of financing.

External sources there can be loans from international financial associations and foreign states, as well as gratuitous and irrevocable financial assistance for the implementation of targeted programs of international importance.

Internal sources are loans from the Central Bank (in Ukraine - the National Bank), internal government loans (sale of state valuable papers - government bonds) and other income.

It is also important to note that the attraction of domestic sources is a factor in increasing the interest rate in the economy and creates the effect of crowding out private investment, described above (the economic activity of the private sector is reduced).

Emission method covering the budget deficit is the use of monetary emission. This does not reduce the economic activity of the private sector, but this method is impractical because it negatively affects the economic and social situation of the country, causing inflation.

The choice of a way to cover the deficit is associated with a specific macroeconomic situation and its consequences. In this regard, the least problematic is the repayment of the budget deficit by issuing securities.

The presence of external and internal credit sources predetermines the emergence, respectively, of the external and internal debt of the state. The state should exercise control and management of the public debt.

State debt Is the sum of budget deficits minus budget surpluses for all past years.

Basic form domestic debt are government loans, which are secured by the issue of securities in two types - bonds and treasury obligations (in Ukraine, these are bonds of the internal government loan of OVGZ; bonds of the internal government savings loan of the OVGSZ, the issuer of which is Savings bank Ukraine, treasury bills, etc.). The internal state debt also includes the state debt for the maintenance of the social sphere (arrears in payments wages, pensions, subsidies, grants, scholarships, etc.).

The entire amount owed to creditors outside the country becomes her external debt ... It is formed due to the following circumstances:

§ placement of debt securities on international financial markets (for example, Ukraine places government bonds on the German financial market);

§ obtaining loans from specialized financial and credit institutions (International Monetary Fund, International Finance Corporation, World Bank for Reconstruction and Development, etc.);

§ obtaining loans from other states.

With a significant amount of public debt, the cost of servicing it (payment of interest and principal) may become the main or even the only reason for the budget deficit, but the absolute amount of debt cannot be used to determine whether the public debt is large or small. Therefore, the dynamics of public debt is studied by the share of public debt in national income.

As a rule, from the current budget revenues unable to pay interest in full and pay off loans on time, so governments resort to new loans ( refinancing of public debt). At the same time, the state acts as a guarantor of their return. However, the refinancing process cannot be considered endless, since the excess of government debt over GDP (GNP) by more than 2.5 times is considered dangerous for the stability of the economy.

The budget deficit and public debt have a mutual influence and require an active financial policy from the state. The state, by managing the budget and public debt, has the ability to influence the economic situation in the country through change tax rates, issue and placement of government debt, financing the budget deficit. Consequently, the budget is the most important instrument of public administration.

In the future, the role of the budget in social processes will increase. This is due to the fact that it is the budgetary funds in conjunction with extrabudgetary funds that are financial basis for the implementation of social transformations, the transition to a new, higher level of social services for the population. In addition, the state budget is intended to neutralize the social consequences of the stratification of citizens in their material wealth, which are caused by the transition to market conditions of management.

Abstract topics:

1. Theory of supply economics - an alternative to Keynesianism

2. Taxes: essence, types and role in economic regulation

3. Fiscal policy in modern Ukraine

4. Overcoming the budget deficit and anti-inflationary policy

5. Modern budgetary policy of Ukraine

Control tests:

1. Fiscal policy preventing recession implies:

a) reduction in tax revenues and government spending;

b) an increase in tax revenues and government spending;

c) increasing the level of taxation and reducing government spending;

d) tax cuts and more high level government spending.

2. The theory of supply-side economics argues that incentive fiscal policy involves:

a) an increase in the level of taxation; b) lowering the level of taxation;

c) achievement of budget surplus; d) an increase in government spending.

3. There is a difference in the multiplier effect of increasing government spending and reducing taxes by the same amount, due to the fact that:

a) tax cuts have a more significant impact on the budget than an increase in state. expenses;

b) tax cuts will not have a direct impact on the amount of consumer spending, since there will be a slight increase in savings;

c) a change in taxes directly affects the amount of consumer spending and income, and a change in state. costs have an indirect impact;

d) state. expenses, increasing income in the economy, contribute to the growth of consumer spending.

4. The balanced budget multiplier shows that:

a) the same increase in state. expenses and taxes increase income by the amount of their growth;

b) the same increase in state. spending and tax cuts do not change the fiscal balance;

c) the same decrease in state. spending and tax increases do not change the fiscal balance;

d) multidirectional identical changes in state. expenses and taxes do not change income.

5. The government's manipulation of government spending and taxes to achieve the desired level of income and production refers to policies:

a) supply economy; b) balancing the state budget;

c) built-in stabilizers; d) incentives aggregate demand.

6. The influence of built-in automatic stabilizers is manifested in the following:

a) they weaken the effect of discretionary policies;

b) they enhance the effect of discretionary policies;

c) they completely eliminate cyclicality economic development;

d) they smooth out the cyclical nature of economic development.

7. The concept of a balanced budget assumes:

a) deficit-free budget for the year; b) the absence of a passive budget deficit;

c) the presence of a budget surplus; d) deficiency-free within economic cycle.

8. Public debt is the sum of all previous:

a) government spending; b) budget deficits minus budget surpluses;

c) budget deficits; d) budget surpluses minus budget deficits.

9. Crowding-out effect associated with public debt financing:

a) leads to a reduction in production capabilities; b) leads to a decrease in debt;

c) leads to an increase in the interest rate; d) reduces private investment spending.

10. Cyclical budget deficits are a consequence of:

a) growth of state. spending and tax cuts during a downturn;

b) reduction of state. spending and tax increases during a downturn;

c) growth of state. spending and tax cuts during a period of inflationary rise;

d) reduction of state. spending and tax increases during the period of inflationary rise.

The government of any country strives to equalize the revenue and expenditure side of the state budget. The correspondence between income and expenditure items of the budget is called the "income balance".

In practice, the expenditure side usually exceeds the revenue side. The formation of the budget deficit is explained by several reasons, among which are:

• - decline in the country's production;
• - overestimated costs for the implementation of adopted social programs;
• - overestimated defense costs;
• - increasing the share of the “shadow” sector of the economy;
• - an increase in the marginal costs of social production.

Special attention is paid to the decline in production and the growth of the "shadow" sector. Both reasons lead to a decrease in the tax base. When production declines, profits decrease and, as a consequence, revenues to the country's budget decrease.

As a result, the budget revenue plan is not fulfilled. In the case of the shadow economy, enterprises stop paying taxes altogether. "Gray" firms are nowhere listed in the tax and, therefore, they do not pay any taxes.

The budget deficit in itself cannot be extremely negative for the development of the country's economy and the dynamics of the living standards of the population. Even economically developed countries (EU countries, USA) in difficult periods, as a rule, have a budget deficit of 10 to 30%. Everything depends on the reasons for the emergence of a deficit budget and the direction of spending of public funds. If the funds that make up the excess of expenses over income are directed to the development of the economy, are used for the development of priority sectors, that is, are used efficiently, then in the future the growth of production and profits in them will more than compensate for the costs incurred and society in in general, such a deficit will only benefit.

If the state does not have a clear program for the country's economic development, and the excess of expenditures over revenues is allowed in order to patch up "financial holes", then the budget deficit will lead to an increase in negative aspects in the development of the economy, the main of which is the intensification of inflationary processes.

The budget deficit continues the line of negative economic categories, such as inflation, crisis, unemployment, bankruptcy. But at the same time, these economic categories are integral elements economic system countries. Without them, the system is not capable of self-propulsion and progressive development.

The budget deficit may be associated with the need to invest large public financefunds in the development of the economy, and then it is not a reflection of the crisis course of social processes, but rather becomes a reflection of the government's desire to ensure progressive shifts in the structure of social reproduction.

To cover the budget deficit, the government mainly turns to the Central Bank of the Russian Federation for help in loans and government loans. As a result, it forms and gradually grows state debt... Since government bonds and loans are "government debt".

If the state constantly covers the deficit in such ways, then the growth of state loans can lead to the bankruptcy of the country. In addition, the growth of the state's debt is a vivid evidence of the government's complete indifference to the fate of the younger generation, since they will have to pay for the current debts of the state.

There are three traditional ways covering the budget deficit:

• - issue of state loans;
• - tougher taxation;
• - money production, or "seigniorage", that is, printing money.

Nowadays "seigniorage" is not just printing cash, because, otherwise, it causes inflation.

The current "seigniorage" is expressed in the reserves of commercial banks, which are concentrated in the Central Bank of the Russian Federation and can be capitalized to cover the state budget deficit. However, the Central Bank's policy aimed at increasing the amount of cash reserves coming to it from commercial banks causes dissatisfaction with the latter, weakens their financial position and increases contradictions within the country's financial system. In world practice, there are four main ways to solve the budget deficit problem:

• 1. Reducing budget expenditures;
• 2. Search for sources of additional income;
• 3. Issue (emission) of unsecured money used to finance government spending;
• 4. Granting on credit money of citizens, banks, economic organizations, other states and foreign state organizations.

Reducing budget expenditures. In theory, the easiest way to overcome the budget deficit, in practice - the most painful. Reducing social programs, benefits and transfers leads to increased tension in society and undermines its political stability. Therefore, take such a step the state goes last but not least, if the other three methods of overcoming the budget deficit cannot be implemented.

Search for sources of additional income. Attracting additional income to the budget is the most effective way.

But in practice, it is extremely difficult to solve such a problem. Of course, you can try to raise taxes or duties. But this path is dangerous. Economic science I discovered long ago that an excessive increase in the tax burden leads not to growth, but to a reduction tax revenues state.

There are two reasons for this:

• - people lose interest in work if too large a share of their earnings is taken away by the state;
• - people begin to hide their income from taxation, and then the “shadow economy” is rapidly developing in the country, and economic relations are strongly criminalized.

This picture is well illustrated by the graph of the American economist Arthur Laffer and named after him the Laffer curve (Fig. 1).

Figure: 1. - Laffer curve - tax policy model:

The straight line on the graph shows how the absolute amount of tax revenues to the budget would grow with an increase in tax rates, if people and firms were indifferent to their size. But since in fact the value of this rate is of great interest to all taxpayers, such an increase in budget revenues never happens in life. On the contrary - and this is precisely what the Laffer curve shows - beyond a certain limit, an increase in the tax rate no longer leads to an increase, but to a decrease in the absolute value of budget receipts.

If no measures on the part of the government in the field of taxation bring an increase in state revenues, then the demands on the state to give money drive it into a corner, and then the most dangerous way to cover its expenses is chosen - emission.

Emission. An easy but dangerous way to replenish the state budget: issuing money in excess of the real needs of the economy. It is not difficult for the state to print additional banknotes and pay them increased salaries to its civil servants. But this method of covering the budget deficit will soon create an even worse economic situation.

The reason is simple - the nationwide market immediately determines true value this money. He reacts to their appearance with a jump in prices or the disappearance of goods from the shelves. Therefore, the budget gains from the excessive emission of money turns out to be short-lived. Moreover, the world experience says: the budget always loses the race with inflation. After all, its costs are growing faster than the amount of tax revenues.

Providing money on credit. Like a citizen or an economic organization, the state, when there is a shortage of money, can lend it so that budget inequality turns into an identity, that is:

The state can borrow from its own (state) bank. In addition, withdrawing money from The Central Bank, the government loses the income that it, as the owner of this bank, could have received. The forms of borrowing can be very different, most often through the sale of government securities. Government securities are the government's obligation to return the amount borrowed plus interest on the use of this money.

Lending money on credit solves one problem and then immediately gives rise to another - the need to raise money tomorrow to pay off debts. Borrowing money creates public debt.

Public debt is the amount of loans that have been taken out by government agencies and have not yet been repaid to creditors. They are divided into two types: internal and external.

Any of these paths does not bode well for either the country's leadership or citizens. This situation can be prevented only by conducting a very carefully thought out and consistent state financial policy.

Budget deficit

Sources of financing budget deficit

-Internal sources - External sources

Height interest rates has, in turn, the following consequences. So, the high loan set in USA in the mid-80s, caused a significant outflow of capital from Western Europe... According to estimates of Western economists, the United States currently absorbs up to 15% of all accumulations of the capitalist world. Thus, the US external debt is growing. Plus, the growth in demand for high-yielding US securities caused an increase in global demand for dollars. This rise in the international value of the dollar has a significant depressing effect on the United States: products are becoming too expensive for foreign buyers. Reducing the same pure exporting has a restraining effect on the economy, increases the unemployment rate.

The essence of the concept of budget deficit management.

The negative consequences (financial, economic, social) of a huge budget deficit urgently require the implementation of a system of measures to overcome it, an active financial policy, and the use of methods generally accepted in world practice to combat the deficit. It should be borne in mind that the ways of solving this problem are largely determined by the extent to which (zero or otherwise) and at what pace you need to strive for a balanced budget of costs and revenues.

When developing a strategy to combat the deficit, it is necessary to be guided by the following:

To overcome the budget deficit, it is necessary to "" treat "" the economy itself, because without ensuring dynamism in its development and real tangible efficiency, it is impossible to achieve financial sustainability countries, no matter what progressive measures are applied in this case.

Unjustified are measures based on the idea of \u200b\u200bachieving a balance between the benefits and costs of the budget, eliminating the budget deficit in a short time. Such an aspiration, not supported by real steps towards stabilizing the economy itself, will only complicate the already difficult financial situation in the country and create unnecessary obstacles on the way to a decent exit from the crisis.

The program of specific measures to reduce the budget deficit should include and consistently implement such measures that, on the one hand, would stimulate cash inflows to the country's budget fund, and on the other, would help to reduce costs. These include:

Changing the directions of investment of budgetary funds in the industry national economy with the aim of significantly increasing the financial return on each budget ruble.

The desire to reduce some items of the cost of maintaining the administrative and managerial apparatus (ministries, departments, the Administration of the President of Russia).

Ordering taxation systems, a decrease in the number of taxes and an increase in the collection of taxes, fees, customs taxes, etc. All this, as well as a decrease in the tax rate, will create favorable conditions for ensuring investment and, consequently, reviving production.

It is necessary to wage a decisive struggle against inflation, to achieve stabilization of money circulation in the country. Control is needed prices and wages by setting limits for their growth.

Strengthening financial discipline, streamlining payments between enterprises, increasing the profitability of work enterprises industry and agriculture.

Payment of external debts will also help to eliminate the crisis. One of the most important tasks is to achieve an end to subsidence in foreign banks parts proceeds from exporting.

It is necessary to reduce the decline in industrial and agricultural production and stabilize it. It is necessary to develop a plan for the restoration of the national economy.

It is necessary to increase the share of budgetary borrowings in the non-banking sector by attracting funds from the population, enterprises, organizations and other investors; to expand the range of government securities for the population. To maintain a balanced internal financing of the market, the necessary coordination of the issue of federal, regional, municipal loans must be ensured.

In order to stimulate foreign investors, continue to improve the system of financial, currency and customs benefits. This will create a more favorable environment for attracting foreign capital into our economy.

Summing up a brief summary of this chapter, we can conclude that the budget deficit is the excess of budget costs over its benefits. There are a number of reasons for the emergence of a budget deficit, the main of which are: the need to make large state investments in the development of the economy;

Extraordinary circumstances when ordinary reserves become insufficient;

Crisis phenomena in the economy, ineffectiveness of financial and credit ties, inability of the government to control the financial situation in the country. The main consequence of the budget deficit is the increase in public debt. The existence of the budget deficit problem leads to the need to find ways to solve this problem.

Financing budget deficits in developing countries

Ways of financing the budget deficit.

There are three main ways to finance the government budget deficit:

Monetizing the budget deficit;

External debt financing;

Domestic debt financing.

Financing the state budget deficit by monetizing the deficit.

This method of financing consists in the fact that the central bank provides the amount necessary to cover the budget deficit to the government. Thus, this method is the central bank, since, as a rule, the government sells to the central bank, for which the Central Bank pays it, providing an opportunity to pay the excess of government costs over budget benefits. Since the central bank is a state institution and does not have its own income, in order to pay for government securities purchased from the government, the Central Bank must "print", issue money. As a result, additional money gets into circulation, and an increase money supply aggregate (the amount of money in circulation). Therefore, this method of financing is called monetization of the budget deficit.

The advantages of this method of financing:

The growth of the monetary aggregate is a factor in increasing aggregate demand and, consequently, production. An increase in the supply of money leads to a decrease in the interest rate ( prices credit) for money marketthat stimulates investment and ensures the growth of total costs and total money supply;

This measure can be implemented quickly. The growth of the aggregate of money supply occurs when the central bank buys government securities and, paying sellers (households and firms) for the cost of these securities, issues additional money into circulation. He can make such a purchase at any time and in any required volume.

The main disadvantage of the emission method of financing the budget deficit is that an increase in the Monetary Aggregate leads to inflation, i.e. it is an inflationary way of financing.

In conditions of rising inflation, the so-called "Tanzi effect" arises - the deliberate delay by taxpayers of the deadlines for making tax payments to the State budget, which is typical for many transition economies. The growth of inflationary tension creates economic incentives for "postponing" the payment of Taxes, since during the "delay" the depreciation of money occurs, as a result of which the taxpayer wins. As a result, the State Budget Deficit and the general instability of the financial system may increase.

The monetization of the state budget deficit may not be accompanied directly by the Monetary emission of cash, but is carried out in other forms - for example, in the form of expanding Central Bank Loans to State Enterprises at preferential rates or in the form of deferred payments.

Deferred Payments is a way of financing the Budget Deficit, in which the government buys Goods and services without paying them on time. If purchases are made in the private sector, then manufacturers increase Prices in advance in order to insure against possible non-payments. It gives rise to a boost general level Prices and Inflation Rate.

If deferred payments accumulate in respect of public sector enterprises, then these deficits are often directly financed by the Central Bank or accumulate, unlike monetization, they are officially considered a non-inflationary way of financing the Budget deficit; in practice, this division turns out to be very conditional.

Financing of the State Budget Deficit through Internal Loans.

This method consists in the fact that the State issues Securities ( State bonds and treasury bills) and sells them to the public (households and firms), using the proceeds to finance the excess of government Spending over Benefits.

Bonds are the most common type of Securities. It is symbolized by the State Debt obligation and entitles its owner to receive a certain amount of the Debt and Interest at the end of the Term.

The state sets the face value (par price) of bonds. It is designated on bonds and is expressed sum of moneyprovided by the bondholder to the State for temporary use. This amount is paid to the owner of the bond at maturity and interest is charged on it. However, the real bonds for their holders may be more or less than the established nominal Interest. This is due to the fact that bonds are being sold at the market price deviated from the face value.

Treasury bonds. Their main difference from bonds is in the purposes of the Issue of securities, the form of payment of Profit and freedom of circulation. Funds received from the Sale of Bonds are used to replenish the budgetary fund, off-budget funds, or specially agreed purposes. The state allocates funds from the implementation of treasury obligations only to replenish the Budget. On bonds of government Credits, Profit can be paid in the form of Interest, winnings or not paid at all (for targeted Loans). The conditions for the fulfillment of treasury obligations provide for the Payment of Income only in percent.

Bonds can be freely tradable and with a limited range of circulation, treasury obligations are subject to sale only among the population.

The advantages of this method:

It does not lead to inflation, since it does not change (part of household savings in the form of payments for purchased government bonds is transferred to the government, i.e. money only passes from one economic agent to another), therefore, in the short term, it is not an inflationary method of financing ;

This is a fairly prompt method, since the Issue and placement (sale) of Government securities can be provided quickly. The population in developed countries buys with pleasure, because they are highly liquid (they can be sold easily and quickly - this is "almost Money"), highly reliable (guaranteed by a trusted State), practically risk-free and sufficiently profitable (interest is paid on them).

Disadvantages of this method:

Debts have to be paid. Obviously, the population will not buy Gos. bonds, if they do not bring Profit, i.e. if no interest is paid on them. Payment of Interest on State. bonds are called government debt service. The more government debt (the more Federal Loan Bonds issued), the more large sums should go to debt service. And the payment of Interest on State. bonds are a part of the State Budget Costs, and the more they are, the greater the Budget Deficit. It turns out a vicious circle: the State issues bonds to finance the deficit of its Budget, the payment of Interest on which provokes an even larger deficit. Moreover, two American economists, Nobel laureate Thomas Sargent and Neil Wallace, proved that debt financing of the government deficit can lead to even higher inflation than emission. This idea has received the name of the Sargent-Wallace theorem in the economic literature. The fact is that the State, financing the Budget Deficit at the expense of an internal Loan (Issue of securities of Federal Loan Bonds), as a rule, builds a financial pyramid, paying off past Debts with a Loan in the present, which will need to be repaid in the future, and the debt repayment includes both the amount of the Debt itself, and the Interest on Debt. The state thus refinances the Debt. If the State uses only this method of financing the State Budget deficit, then a moment may come when the Deficit will be so great (i.e., there will be so many Federal Loan Bonds issued, and the Costs of servicing the State Debt will be so significant) that its debt financing will become impossible and it will be necessary to use Issue Financing. But at the same time, the size of the Issue of securities will be much larger than if it is carried out in reasonable amounts (in small portions) every year. This could lead to a surge in inflation in the future. Associated with this is the second lack of financing the State budget deficit at the expense of the internal Loan:

This method is non-inflationary only in the short-term Period, and in the long-term Period it can cause a fairly high Inflation. Paradoxically, in order to avoid high Inflation, it is more reasonable not to abandon the emission method of financing, but to use it in combination with debt financing;

A significant drawback of the debt financing method is the crowding out effect of private investment.

The economic implication of the crowding out effect is as follows: an increase in the number of Federal Loan Bonds by Securities market leads to the fact that part of household savings is spent on the purchase of government securities, and not on the purchase of securities of private firms, which could provide expansion of production and contribute to economic growth. This reduces investment resources and therefore investment costs of private firms. Moreover, the fight for credit funds leads to an increase in their Price - the Interest rate, i.e. to the rise in the cost of loans, as a result of the investment costs of firms are reduced.

Financing of the state budget deficit at the expense of external Loans.

A specific method of financing is external, which is based on obtaining the necessary funds from the governments of developed countries or international financial institutions (International Monetary Fund -- IMF, World Bank, London Club, Paris Club, etc.). As a rule, the Credit is made through the Sale of private and Government securities, i.e. financial assets, although some developing countries and countries with economies in transition sometimes use direct loans.

The advantage of this method is the possibility of obtaining large sums in conditions when the internal Credit for some reason is impossible or inexpedient, and the financing of the state budget deficit by the issuance method creates a threat of high inflation.

Disadvantages of this method:

The need to repatriate the Debt and service the Debt (payment of both the amount of the Debt itself and the Interest on the Debt);

Impossibility to build financial pyramid to pay off the external debt;

The need to divert funds from the country's economy to pay off the external Debt and service it, which leads to a reduction in domestic production and a downturn in the economy;

With a deficit in the Balance of Payments, the possibility of depletion of the country's gold and currency reserves.

So, all three ways of financing the state budget deficit have their advantages and disadvantages. And as a result of using the second and third methods of financing the state budget deficit, the state debt is formed.

In addition, the world practice of regulating the Budget deficit as one of the methods for solving this problem suggests increasing the revenue or reducing the expenditure side of the Budget.

Financing the Budget Deficit in Developing Countries.

In most developing countries, public budgets are in deficit. The main source of financing the state budget deficit in developing countries is government loans. However, some countries with developing economies use the funds of the central issuing banks, lending to the State through the additional emission of money securities. Financing the state budget deficit by monetizing (issuing securities) the deficit is not the best way out, as it leads to a significant development of inflationary processes, which developing countries may not be able to cope with. a sharp increase in the level of unsatisfied effective demand, which leads to a significant decrease in the living standards of the population and can exacerbate social tension.

For this reason, countries with developing economies to resolve the problem of financial deficits resort to domestic and foreign borrowing.

The winning way for developing countries is internal long-term financing Budget deficit. The Government issues bonds of domestic government Loans for financing, while the previously issued Loans can be repaid through the Issue of new Loans securities, i.e. at the expense Additional capital investment... There is an additional capital investment of the state debt.

For the poorest Countries, Domestic Funding is not feasible, so only external Debt Funding is applicable to them. Among external sources, the main ones are Loans and Credits provided on the basis of bilateral intergovernmental agreements or international financial organizations ( International Bank for Reconstruction and Development, International Finance Corporation and International Development Association), as well as funds from private Private Banks in developed Countries. Most developing countries tend to increase external debt, although in a number of countries domestic debt prevails. Leading methods of external debt repayment used by international creditors,

Writing off part of the Debt from the poorest Countries;

Restructuring of external debt (extension of the terms of its repayment and payment of agreements);

Exchange of Debts for shares of privatized Enterprises.

Nowadays, external debt financing is used not only by the poorer private banksnot developing countries, as well as developed countries, resort to this method. Developing Countries raise Money from international financial institutions such as the IMF or, or directly from developed Countries. Also Developing Countries are listing on International Markets Capital Debentures. The volume of issued Eurobonds (promissory notes issued Lender when receiving a long-term Loan on the European market; type of Securities)

It should be noted that the attraction of investments, and primarily foreign ones, has a certain indirect effect on reducing the budget deficit. Foreign Investments are willingly used by all States, including countries with developed market economies.

For example, the financing of the Chinese economy is significantly different from other developing countries. The main source of external financing of the Chinese economy, at present, is FDI, which accounts for about 69% of all foreign investment received by the PRC. At the same time, two other forms of external financing - Loans and only 26 and 5% of accumulated foreign capital investments. Compared to developing countries in Latin America and Asia, in China, the share of FDI in the structure of external financing is significantly higher, respectively, the role Portfolio investment significantly less

Implementation of financing the budget deficit in Russian Federation.

Consider the Financing of the Budget Deficit in Developing Countries using the example of the Russian Federation. In the Russian Federation, “the sources of financing the budget deficit are approved by the legislative (representative) government in the Law (decision) on the Budget for the next Budget year by main types of borrowed funds ”.

1990 - 1994 to cover the budget deficit in the Russian Federation, money emission was mainly used, which served as a powerful inflationary factor. For example, in only three quarters of 1991, the ruble supply increased from 989 billion. rub. up to 1,700 billion rubles.

The growth of inflationary processes was reflected in the growth of prices for goods and services and a sharp increase in the level of unsatisfied effective demand, which led to a significant decrease in the living standards of the population, exacerbated social tension.

Since 1995, Monetary emission of Money for financing the budget deficit has not been applied. According to the current Budget Code of the Russian Federation “Loans of the Russian Central Bank, as well as the acquisition Russian Central Bank Debt liabilities of Russia, constituent entities of Russia, municipalities at their initial placement cannot be sources of financing the budget deficit ”.

According to the Budget Code of the Russian Federation, “the sources of financing the federal budget deficit are:

internal sources in the following forms:

Loans received by Russia from credit institutions in the Currency of Russia;

Government Credits carried out by issuing securities Securities on behalf of Russia;

Budget Loans received from budgets of other levels of the budgetary system of Russia;

Proceeds from the sale of state-owned property;

The amount of the excess of Revenues over the Costs of state reserves and reserves;

Changes in the balances of funds on accounts for accounting for federal budget funds;

external sources of the following types:

Government Loans carried out in foreign currency by issuing securities Securities on behalf of Russia;

Loans of foreign governments, banks and firms, international financial organizations, provided in foreign currency, attracted by Russia ”.

In 1995-1996. the main sources of covering the budget deficit were domestic borrowing, whose share was approximately the same in the total budget deficit throughout the entire Period (65.2 in 1995 and 63.3% in 1996).

Then internal sources of financing the federal budget deficit began to be replaced by external ones. Thus, already in 1998, external loans were attracted for an amount exceeding the amount of internal loans by 6.3 billion rubles. (91.4 billion rubles and 85.1 billion rubles, respectively). The reason for this was the lack of budget efficiency of the government debt market, the consequence - an increase in the external dependence of the Russian Federation.

Now a large share of financing of the RF budget deficit comes from sources of internal financing. What can be seen in Table 6. In more detail, all sources of financing of the budget deficit for 2005 - 2006

At the moment, the main tasks in the field of the Policy of financing the federal budget deficit of the Russian Federation are:

In continuation of the course towards its non-inflationary coverage with a consistent reduction in the volume of external borrowings;

Increasing the share of budgetary borrowings in the non-banking sector by attracting funds from the population, enterprises, organizations, and other Investors... The range of government securities for the population should be expanded;

Coordination of the Issue of securities of federal, regional and municipal loans in order to maintain the balance of the internal financial market.

Summing up a brief summary of this chapter, we can conclude that the solution to the problem of the Budget Deficit lies in choosing the appropriate method of financing it. The process of financing the budget deficit can be controlled by choosing one or another funding source, maneuvering the terms of the issue of government securities, the ratio of domestic and foreign loans, creating favorable conditions for maintaining domestic savings of the population, indexing securities and deposits, limiting the cost of servicing government Debt, etc. In the best way Financing for developing countries is domestic debt financing, but external debt financing is also readily used by many countries.

After a relatively detailed analysis of the chosen topic, it is necessary to summarize, concluding this work... In the Work Process, all the goals and objectives formulated in the introduction were completed. The role of the budget deficit in the modern economy is revealed, methods of financing the budget deficit and sources of financing in developing countries are analyzed using the example of the Russian Federation.

In conclusion, I would like to say that it is impossible to unequivocally determine whether it is good or bad - the Budget Deficit, if only because the nature of the deficits is different. Deficits can arise as a result of severe production decline and economic collapse. Here, the Deficit represents the government's inability to finance its own Spending. But Scarcity can also be the result Economic policy States: tax cuts to stimulate production. As history shows, in this case, the State can afford a fairly large and even increasing Budget Deficit for a long period of time, provided that the country's economy develops at an even more rapid pace.

Much also depends on what sources the Deficit is financed from. For example, the deficits of the 80s. in the United States were huge, but 80% of the Percentage was financed by the sale of government obligations to the population of the Country, and obligations are mainly of a long-term nature. This allowed the US government to make its huge 3-trillion debt safe for the national economy and for the well-being of citizens. For a long time, there was another extreme in the Russian Federation. In the conditions of total mistrust of internal and external Borrowers to the State, the emphasis was on Issue short-term liabilities, which, of course, increased the burden on an already unrealistic budget. As a result, this method of covering the deficit led to The financial crisis and to a sharp drop in household income. At the same time, balancing the Budget by attracting foreign currency loans of foreign governments and various international funds has led to the fact that the prospects for the country's economic development today are largely not in the hands russian government, and in the hands of their Borrowers In other words, the nature and consequences of the Budget Deficit are entirely dependent on the actions of the government. If financial resources, which make up the excess of Costs over Benefits, are directed to the development of the economy, are used for the development of priority Industries, that is, are used effectively, then in the future the growth of production and Profits in them will more than compensate for the produced ones and society as a whole will only benefit from such a deficit. If the government does not have a clear program of economic development, and the excess of Costs over Benefits allows for the purpose of patching up “financial holes” and subsidizing unprofitable production, then the budget deficit will inevitably lead to an increase in negative aspects in economic development. This is the essence of the Budget Deficit.

The concept of budget deficit, its types A decisive role in the formation and development of economically any modern society is played by state regulation carried out within the framework of the elected Government Economic policy... One of the most important mechanisms allowing the State to carry out economic and social regulation is its financial system, the main link of which is the state budget. It is through the financial system that the State forms centralized funds and influences the formation of decentralized funds, ensuring the ability to perform the functions assigned to state bodies. but this system often faces problems expressed in the form of budget deficits. Therefore, one of critical issues public finance is the problem of the budget deficit. In the process of adoption and execution of the Budget, the balance of Income and Expenditures is of great importance. If Income exceeds Expenditure, then there is a surplus. But more often, Expenses exceed Income. In this case, a Deficit occurs. There are many reasons for this (the decline in social production, the massive release of "empty" money, significant social programs, large-scale turnover of "shadow" Capital, huge non-production expenses, losses, registration, theft, etc.), but the growing role of the State in various spheres of life, the expansion of its economic and social functions, an increase in military expenditures, the size of the state apparatus is of paramount importance. The budget deficit belongs to the so-called negative economic categories such as Inflation, Crisis, unemployment, which are, however, integral elements of the economic system.

It should be noted that the lack of deficit of the Budget does not mean the "health" of the economy. At the same time, any State seeks, if not to fully cover, then partially reduce the Budget Deficit. The budget deficit is due to various reasons. In some cases, the State may deliberately increase the budget deficit. In particular, in order to stimulate economic activity and aggregate demand in a downturn in production, the government may make special decisions aimed at increasing the level of employment (for example, Financing programs to create new Work places) or by significantly reducing taxes. As a result, the Budget Expenses increase or its Revenues decrease, and a Deficit arises. But this Deficit was deliberately created by the State. Such a Deficit is called a Structural Deficit. Unlike the structural cyclical deficit, to a lesser extent depends on the conscious fiscal policy of the State. It is due to the general decline in production that occurs at the stage Crisis and is the result of the cyclical development of the economy. In the conditions of a decline in production, taxes and State Revenues are reduced, which means that a Deficit arises. There are also active and passive deficits. An active deficit arises as a result of the excess of Costs over Benefits, and a passive deficit as a result of a decrease in tax rates and other revenues, which is a consequence of a slowdown in economic growth, underpayments, etc.

Distinguish between short-term and long-term imbalances in the Budget. The imbalance is of a short-term nature, if the excess of Costs over Benefits is limited to one Budget year and is a reflection of changes in the macroeconomic situation in comparison with the one in which the budget was drawn up. This is mainly due to the lack of the necessary experience in macroeconomic forecasting, insufficient consideration of possible changes in a number of circumstances. For example, a reduction in budget revenues may occur as a result of a fall in export prices, a decrease in production volumes below the foreseen level, shifts in the structure of demand for manufactured products and a decrease in their competitiveness. An increase in the budget deficit may also be caused by an unexpectedly sharp increase in government spending due to inflation in excess of the stipulated value, the expansion of transfer payments in combination with the introduction of tax incentives, which is a very popular measure before the next elections. The long-term imbalance in the Budget is related to the widening of the Gap between Government Costs and Benefits over the years and is due to reasons that are more sustainable. So in most developed countries over the past 15 years, there has been a steady trend towards an increase in the national budget deficit by the following factors: - an increase in the number of social payments, and hence the social burden on the budget; - unfavorable demographic situation associated with the aging of the population, as a result of which the expenditures for the payment of pensions, allocations for health care, etc .; - liberalization of tax Legislation and as a consequence of this, a decrease in the magnitude of tax rates (without a corresponding adjustment of government spending);

- an increase in the volume of external debt. In general, the state of the state budget is determined by the long-term trend in the dynamics of tax revenues and government spending; the stage of the economic cycle in which the economy is in the period under consideration; the current Policy of the State in the field of budgetary Expenditures and Revenues. Very often, especially in our Country and in other Countries, there is an artificial or overestimation or underestimation of the true value of the Budget deficit. So, artificially lowering the budget deficit can be carried out using the following tools: - "tax amnesty", which allows taxpayers who have previously evaded Tax to pay in one time the entire amount equal to a certain part of the total tax due; - measures to collect overdue tax payments; - introduction of temporary or added Taxes; - deferral of salary payments to public sector employees; - deferred mandatory indexation of wages in accordance with the dynamics of the inflation rate; - sale of state Assets; - the presence of a hidden deficit due to quasi-budgetary Costs. The latter include centralized Loans provided for preferential terms Central Bank. In addition, the Central Bank can finance certain operations related to the state debt, cover losses from measures to stabilize the exchange Currency rates, refinance agriculture etc. As a result, losses grow and intensify, while the Deficit does not grow.

Artificial overestimation of the size of the state budget deficit may occur as a result of the following circumstances. First, when assessing the value of government expenditures, it is not always taken into account Depreciation in the public sector of the economy. Secondly, an important item of government spending is government debt service. However, very often the amount of interest payments on the Debt is overestimated due to inflationary payments. At high inflation rates, when the differences in the dynamics of nominal and real Interest rates very significant, this overstatement of government spending can be significant. Situations are even possible when the nominal (official) Deficit and State Debt are growing, while the real Deficit and Debt are decreasing, which significantly complicates the assessment of the Government's Policy. Therefore, when the budget deficit changes, an inflation adjustment is required. With this amendment, the real budget deficit is determined, which is The difference between the nominal deficit and the Government Debt Interest multiplied by the rate of Inflation. The Total Budget Deficit net of the inflationary portion of interest payments represents the Operating Deficit. The Budget Code of the Russian Federation establishes the maximum size of the budget deficit at different levels. So, the size of the federal budget deficit for the next Budget year should not exceed the total volume of budget investments and the cost of servicing the state debt of the Russian Federation.

The size of the Budget Deficit of a constituent entity of the Russian Federation cannot exceed 15% of the volume of its Budget Revenues, excluding financial aid from the federal budget. If the amount of proceeds from the Sale of Property is approved in the Law on the Budget, the estimated Budget Deficit of a constituent entity of the Russian Federation may exceed this amount, but no more than by the amount of proceeds from the Sale of Property. The size of the local Budget deficit cannot exceed 10% of the local Budget Revenues, excluding financial assistance from the federal and regional budgets. Moreover, receipts from funding sources The local budget deficit can be used to finance only investment costs and can not be used to finance the costs of servicing and repayment of the municipal debt. If, as a source of reducing the deficit of regional or local budgets the Sale of property is considered, then, according to the Budget Code of the Russian Federation, limit size the deficit of the respective budgets may exceed the specified limits, but not more than by the amount of proceeds from the Sale of Property.

Ways of financing the budget deficit In case of adoption of the Budget for the next Budget Year with a deficit, it is necessary to determine the sources of financing the Budget Deficit. They differ according to the levels of the budgetary system. The sources of financing the federal budget deficit are: internal sources in the following forms: - Loans received by Russia from credit institutions in the Russian currency; - government loans carried out by issuing securities Securities on behalf of Russia; - - proceeds from the sale of state-owned property; - the amount of the excess of Revenues over the Costs of state reserves and reserves; - changes in the balances of funds on accounts for accounting for funds from the federal budget; external sources in the following forms: - government Credits carried out in foreign currency by issuing securities on behalf of Russia; - Loans of foreign governments, banks and firms, international financial organizations, provided in foreign currency, attracted by Russia. The sources of financing the budget deficit of the constituent entity of Russia and the local budget can only be internal sources. For the subjects of the Russian Federation, they are in the following forms: - government loans, carried out by issuing securities Securities on behalf of a constituent entity of Russia; - budget loans received from budgets of other levels of the budgetary system of Russia; - - receipts from the sale of property owned by the state of the constituent entity of Russia; - change in the balances of funds on accounts for accounting for funds from the Budget of a constituent entity of Russia. And for the local Budget: - municipal Loans carried out by issuing municipal Securities on behalf of municipal formation; - Loans received from credit institutions; - budget loans received from budgets of other levels of the budgetary system of Russia; - receipts from the sale of municipal property; - change in the balances of funds on accounts for accounting for funds of the local Budget. The budget deficit can be financed in three ways: - through the Issue of Money Securities (deficit monetization); - Loans from the population of the Country (internal debt); - Loans from other Countries or international financial institutions (external debt).

The first method is called emission or in cash, the second and third - by debt methods. Monetization as a way to reduce the budget deficit is an increase in the amount of money in circulation (including through bank financing). Although this method is used by the State very rarely, in exceptional cases, since it is purely inflationary, it should not be excluded from the arsenal of methods for financing the budget deficit. With monetization, the amount of money in circulation increases, the growth rate of the Monetary aggregate significantly exceeds the growth rate of real GDP, which leads to an increase in the average price level. At the same time, all economic agents pay a kind of inflationary Tax and part of their Income is redistributed in favor of the State through increased Prices. The State has an additional Profit - seigniorage, i.e. new Profit from Printing Money. Monetization of the State budget deficit may not be accompanied directly by the emission of money in cash, but is carried out in other forms. For example, in the form of an expansion of Central Bank Loans to State Enterprises at preferential rates or in the form of deferred Payments. In the latter case, the Government buys goods and services without paying for them on time. If deferred Payments are accumulated in respect of Public Sector Enterprises, then they are often financed by the Central Bank or accumulate, increasing the overall State Budget Deficit. Therefore, although deferred payments, unlike monetization, are officially considered a non-inflationary way of financing the Budget Deficit, in practice this division turns out to be very conditional.

At the same time, it should be borne in mind that the total volume of government debt cannot be too high. Otherwise, public debt becomes difficult to manage. The increase in government spending complicates the problem of controlling future deficits, and the constantly growing interest payments on government debt significantly limit the government's ability to use the Budget as a stabilizing lever of influence on the economy. At the same time, external debt can become a serious factor of not only economic, but also political significance. Excessively high payments from the state budget for Debts divert funds from financing social, economic, defense and other government programs. AT last years significant changes have taken place in the sphere of Russia's public debt. First of all, the structure of public debt has changed significantly, in which the share of domestic debt has grown to almost 50%. First of all, this is due to the fact that the replacement of government external borrowings by internal borrowings is one of the priorities of the Russian debt policy both for the federal level and for the regions of the country.

prioritiesstate domestic borrowing leads to the fact that the country's domestic debt begins to play an active role in macroeconomic regulation, that is, to perform the functions attributed to it by the "new orthodox theory", which is based on calculations made in the last century by John Maynard Keynes in "General Theory Interest, Employment and Money ". In contrast to the classical ideas about the undesirability of financing the budget deficit associated with the military Costs or the Economic downturn due to the monetary Issue of securities and the Issue of government securities and giving priority to taxation, as well as the balance of the Budget, the Budget deficit financed by the Issue of securities Government Securities - the central instrument of Keynesian macroeconomic policy. In Russian practice, it is necessary to take into account foreign theoretical experience, since in the context of persisting high inflation, which in its essence is a hidden tax that is paid by all economic entities and, above all, the most socially unprotected segments of the population, the growth of government domestic borrowing is one effective tool Inflation and maintenance, thus, macroeconomic stability. On the other hand, pulling off the surplus from the financial market, the State must implement this carefully enough so that it does not lead to a reduction in private prioritytions.

Budget deficit and methods of its elimination

E.F. Borisov says. It seems certain that the normal state of all types of budgets is the equality of income and costs. We can judge about this, say, by the Budget of an individual or family.

It is not for nothing that they say on this occasion: “Stretch your legs over your clothes”. The question is, should the state budget be balanced annually? Paradoxical as it may seem, the answer is negative. This is explained mainly by the fact that the state budget should reflect the cyclical movement of the economy. The countercyclical fiscal policy pursued by the state has two unequal results when forming the result of the ratio of Profit and Budget Costs. During a production downturn, the budget naturally has a negative balance (um. Saldo - calculation). This means that when Revenue and Expenditures are equalized in accounting, the budget is reduced to a deficit - Expenses increase significantly, which is important for overcoming the Crisis, and exceed Revenues. During a speculative boom, the budget has a surplus.

A significant excess of Revenues over Costs is a consequence of the large receipt of tax payments during the rise in production. Withdrawal of a significant part of Income during the boom phase helps to reduce the "overheating" of the economy. Hence, it is clear that if the budget is strictly balanced, then the State will not be able to carry out a stabilizing anti-crisis Policy, which is designed to “dampen” economic fluctuations. Moreover, a constantly balanced ratio of government revenue to spending will exacerbate cyclical fluctuations in the economy. So, during the Crisis, the total Demand will be less than required. During the speculative boom, inflation will deepen.

Therefore, it is obvious that: an annually balanced budget is not "neutral" with respect to economic fluctuations; It is advisable to balance the state budget on a cyclical basis, that is, with a surplus in the event of a boom and a negative balance in the event of a decline in production. Meanwhile, a budget with a negative balance is typical. This is explained primarily by the growing role of the State in various spheres of society, an increase in the number of civil servants, an increase in the cost of the military-industrial complex, etc. As a result, the rate of growth of the State's Costs often significantly exceeds the rate of increase in GNP. It is significant that in the XX century. in the United States, government spending increased 350 times. However, the increase in government Revenue, mainly due to Taxes, has its limits. Hence the chronic Deficiency, which is growing not only in absolute size, but also relatively. In the late 1980s, the budget deficit in France amounted to 10% of GNP, in the USA - 12%, in Germany - 14%, in Japan - 16%. in Belgium - 25% and Italy - 25%.

Compared to 1970, this indicator in some countries increased by 4-16 times. Does this mean that the State with the Budget Deficit finds itself in the position of bankrupt, unable to pay its Expenses? No, because it has several sources of funds to cover its deficit.

These include:

Printing new Money, which, of course, gives rise to Inflation;

Non-tax revenues, for example, Income from foreign tourism (in the world as a whole, they amount to 6% of GNP, in the Russian Federation less than 1%);

External Debt is an international loan, which has received wide development in modern conditions. Major debtors are not only underdeveloped, but also developed countries.

Thus, in the 1980s, the United States raised Interest rates in Banks in order to attract foreign investment and thereby finance the budget deficit. In the late 1980s, net debt ( Difference between granted and received foreign loans) of the United States exceeded $ 500 billion (about 11% of GNP), and at the end of the 90s it could reach $ 1 trillion. Doll.;

Domestic Debt - Government securities sold to firms and the public. These include government bonds (the obligation to pay the owner interest ratesits amount of Money in the future) and treasury bills (short-term - up to one year - treasury bills).

They are usually sold at a discount to the nominal (indicated on the paper) Price, which forms the Profit of the owner of the bill when the State buys it back. With the rapid growth of budget Expenditures, the domestic government debt increases just as rapidly. For example, in the United States by the beginning of the 90s, the federal debt amounted to more than 3 trillion. dollars, or over 30 thousand dollars for each family. An increase in government debt has a number of negative consequences. This Debt is an increasing part of GNP (in 1988 in the USA it was 53% of GNP), which reduces the share of Profit going to consumption and accumulation. A constantly increasing part of the Costs is allocated in the Budget for the repayment of the Interest on the internal debt.

In the late 1980s, interest payments on this debt absorbed 15% of all budgetary Expenses in the United States. FRG - eleven%; England - 10% and Japan - 19%. The widespread sale of government securities to enterprises and the population inevitably leads to an increase in interest rates and to an increase in the government's share in the market for loan capital.

The result is the so-called crowding out effect. FROM Securities market those sellers who cannot provide the buyers of the Securities with more reliable Investments are being crowded out. In many Western countries in the 80s a course was taken to limit the growth rate of government spending and stabilize their level in the gross national product.

To this end, ineffective, unpopular socio-economic programs were curtailed, military expenditures were reduced, and a partial conversion of defense Industry, which had a beneficial effect on reducing the budget deficit. Completely different trends in recent decades have been characteristic of the budgetary policy of our country.

Russian budget In the conditions of the command-administrative system in the Union of Soviet Socialist Republics (), the state budget was the main financial plan for the formation and use of the national fund of funds. These funds were spent to fulfill the directive plan for the socio-economic development of the national economy.

Budget and people Extrabudgetary funds and their characteristics (FSS, MHIF, PF, FZ) This is the most important link in the financial system of modern States. By their essence, they are monetary funds special purpose. These funds are created to finance the fulfillment of tasks that arise before society. Since each country has its own specific tasks, there is no single classification of government funds. In addition, their number and purpose in each country, during the transition from one stage of development to another, change.

Government funds differ from each other depending on the duration, purpose of use, legal status. As a rule, the operation of many funds is limited in time. After solving a specific problem, the need for a specific fund disappears. Such funds are called "temporary". Others are created for a long time. They are called "permanent" The first type includes, for example, a special government fund to finance the construction of a new railroad. With the end of construction, the foundation ceases to exist. For example, after World War II, a special fund for economic recovery was created. FRG... Among the permanent funds are road funds, funds social insurance and others. Depending on the purpose of use, state special funds are divided into the following:

Scientific research; are usually directed to Funding fundamental research, government scientific centers, for the construction of engineering centers;

Economic; used to support unprofitable state-owned enterprises, for anti-inflationary regulation of the economy, for the maintenance of airports, highways, power plants;

Social funds; are used to pay old-age pensions, sickness benefits, Unemployment;

Personal and property insurance funds; are used to pay out insurance upon the occurrence of an insured event provided for by the insurance policy - a document confirming Contract insurance.

The most common type of property insurance is insurance against fire, flood, earthquake, and drought. With personal insurance, the insured event is survival to a certain age, disability, death. The state is engaged in insurance, as a rule, when private companies refuse to insure.

This usually happens when insuring military personnel;

Military funds; are at the disposal of the government or the head of state, are created to finance special military events and military research projects of special importance;

Investment funds; are created and used to finance the creation of new companies. With their help, a significant part of the required capital investment is carried out.

For example, in Sweden in the 70s, a similar fund was used to support textile, sewing and ship repair enterprises. Industryrefraining from laying off workers. The main part of special funds is formed either from the state budget or from local budgets (local special funds). They come from direct government subsidies or tax deductions. Some funds (personal and property insurance) are formed through voluntary contributions from legal and physical. persons.

Sources

Economic theory: Textbook. for stud. higher. study. institutions / Ed. V.D. Kamaeva. - 10th ed., Rev. and add. - M .: Humanities. ed. center VLADOS, 2004. - 592p.

Sorokina T.V. State budget: Textbook. allowance for institutions, provide. receiving higher. special education "Finance and Loan" .- Minsk: BSEU, 2003. - 289p.

McConnell Campbell R., Bru Stanley L. Economics. In 2 volumes.Vol. 1 - M .: Respublika, 1995 .-- 400 p.

Zayats N.E., Khankevich L.A. State budget: Textbook. allowance. / Under total. ed. M.I. Tkachuk. Minsk: Vysh. shk., 1995 .-- 240p.

Schiller M., Bradley S. today. - M .: Delo LTD, 1998 - 702 p.

Finance: textbook / ed. prof. Romanovsky M.V., prof. Vrublevskoy OV, prof. Sabanti B.M. - M .: Yurayt-M, 2001.

Vakhrin P.I., Neshitoi A.S. Finance .- M .: Moscow, 2000.

Drobozin L.A. Finance: textbook. - M .: Finance, UNITI, 2000.

Finance: textbook / ed. V.P. Litovchenko. - M .: 2004. - 724s.

Securities magazine Publishing House "RCB"

Budgetary RF (as amended on February 2, 2006). Adopted by the State Duma and approved by the Federation Council on 17.07.98. (Part 2, Section IV, Chapter 13, Articles 93, 94)

Drobozina L.A. Finance. Money turnover. Loan: Textbook for universities. - M .: Finance, UNITI, 2000 .-- 253p.

Analytical report of the VEDI laboratory - "The Russian Eurobond market in 2004 and its development prospects in 2005", 2005.

Official site Federal Service State Statistics: www.gmcgks.ru

Official website of the Federal Treasury ( Treasury Russian Federation): www.roskazna.ru

- Budget deficit excess of budget expenditures over revenues. If you mean D.b. family or company, then no one doubts its inadmissibility. If we talk about the state budget, then the situation is different. Distracting ... Economics and Mathematics Dictionary

Budget deficit - (English budget deficit) in the budgetary legislation of the Russian Federation, the excess of budget expenditures over its revenues (Article 6 of the RF Budget Code *). In accordance with Art. 92 of the RF BC in the event of the adoption of the budget for the next financial year from ... Encyclopedia of Law

BUDGET DEFICIT - Excess of budget expenditures over its revenues. The budget deficit is not an emergency financial phenomenon. It is found in the budgets of many states, and the reasons for its formation may be: first, growth ... Dictionary of Business Terms Political Science. Dictionary.

Budget deficit - excess of budget expenditures over its revenues; ...

There is a close relationship between the state budget and the size of GDP. If we imagine that the amount of government purchases of goods and services is a constant value that does not depend on the level of income, then at a low level of income there will be a deficit, and at a high level - a budget surplus.

If the budget is balanced, then the amount of tax revenue coincides with the amount of government purchases. If an economic downturn is observed in the economy, then the amount of tax revenues to the budget with a constant level of public procurement decreases, and a budget deficit arises. In the phase of economic recovery, the amount of tax revenues is higher than the level of government purchases, there is a budget surplus (surplus). At a given level of government spending and a given level of tax rate, the size of the budget deficit or surplus depends on the amount of income.

Figure 8.1. Cyclical balancing of the state budget

Surplus - excess of income over expenses. If a surplus is found, then it is reduced by: reducing income from the sale of state or municipal property, income from the sale of state reserves and resources; the direction of budgetary funds to pay off debt obligations; transfer of part of revenues to budgets of other levels.

If government spending exceeds revenue, then a government budget deficit occurs. When revenues exceed expenditures, the state has a positive budget balance.

Budget deficit \u003d Expenditure - Income.

Net taxes \u003d Tax revenue - Social security payments.

In this case, the budget deficit can be represented as follows:

Budget deficit \u003d Purchases of goods and services - Net taxes.

or BD \u003d G - T.

The size of the budget deficit is influenced by fluctuations in the volume of national output. During periods of depression, when GDP is declining, the budget is usually in deficit, while during periods of recovery, there is a surplus.

The reasons for these changes in the budget balance lie in the fact that during recessions tax revenues from income tax and other direct taxes are reduced as the tax base decreases. At the same time, during recessions, some types of government spending increase (unemployment benefits and others social payments).

Suppose government spending is 200 monetary units, and the tax rate is t \u003d 0.2. Therefore, at Y \u003d 0, tax revenue is T \u003d 0. When spending increases to 1000 units, then tax revenue becomes equal to government spending (200 units). With an income of 1,500 units, government spending would amount to 300 units, etc.

Thus, with a low level of income, a state budget deficit occurs, with a high level, a budget surplus.

Research by economists shows that an increase in government spending, leading to an increase in revenues, does not provide such an increase in taxes that would "recoup" the increased spending. This means that the amount of tax revenue will always be less than the increase in government spending.

If there is a surplus in the state budget, i.e. if the state takes more with the help of taxes than it gives back, this means that there are more withdrawals from the macroeconomic turnover than injections. The result is a reduction in GDP.

On the contrary, if the state budget is in deficit, i.e. his expenses exceed his income, injections become more than seizures. This means that purchasing power is increasing and GDP is increasing.

Thus, the budget deficit is not an indicator of poor management. Back in the 30s J. Keynes and Swedish economists G. Myrdal and B. Ulin proposed to deviate from the traditional idea that the state budget should be balanced, and to go for some excess of expenditures over revenues to stimulate economic growth, especially during periods of crises.

Indeed, if the state pays more money than it receives, then this increases the purchasing power in society - people buy more, enterprises sell more, increasing the employment of resources.

therefore deficiency is good during unemployment but in the ascent phase it is dangerous, since it leads to inflation, since an increase in purchasing power is not accompanied by an adequate increase in production due to the depletion of resources.

To analyze the sources of education of the state budget deficit, the following are distinguished:

1) structural deficit;

2) cyclical deficit.

Structural deficiency the budget arises during periods of radical breakdown of the sectoral structures of the economies, which are repeated with a frequency of 45-55 years. It is calculated as the difference between current government spending (G) and revenues that could go to the budget if full employment under the existing taxation system:

Bstr \u003d G - t * Yf,

where Vstr is the structural deficit of the state budget;

Yf - GDP assuming full employment;

t is the income tax rate.

Cyclic deficit is the difference between the actual deficit and the structural deficit:

Vcycle \u003d t (Yf - Y),

where Vcycle is the cyclical deficit of the state budget;

Y is the actual GDP for the given year.

During the economic downturn, the state pursues a policy of injections into the national economy and is forced to increase the size of government spending. Initially, the level of increased government spending increases the budget deficit. But the level of government spending and the tax rate can affect not only the size of the budget deficit, but also the level of aggregate demand, hence, the volume of GDP. The increased volume of government purchases increases the volume of revenues, thereby increasing the total volume of tax revenues to the treasury, therefore, the level of the budget deficit should, on the contrary, decrease.

However, taxes affect the amount of aggregate demand through a multiplier. Therefore, the change in equilibrium income (D'-D) is equal to the change in government spending (G'-G) multiplied by the multiplier (MPC). Since the change in the level of income can be written as a change in the value of GDP (Y'-Y), then:

Y'-Y \u003d MPC (G'-G).

It is known that the change in the budget deficit (B'-B) is equal to the change in the level of government spending minus the change in the amount of tax revenues t (Y'-Y), which took place as a result of the change in the level of income:

B'-B \u003d G'-G-t (Y'-Y).

Thus, an increase in government spending will be able to cause a revival of economic activity, in which the amount of taxes collected will exceed this increase in government spending. With a balanced budget, the sum of all savings (S) and net taxes (T) is equal to the sum of government purchases (G) and investments (I), and the balanced budget multiplier is 1:

During economic downturns, the state allows the increase in the state budget deficit. When foreign economists analyzed stabilization fiscal measures, it was found that an increase in the state budget deficit by an equal amount has a different effect on aggregate demand in the country, depending on whether the increase in the budget deficit was financed by reducing taxes or by changing government procurement. With tax cuts, households spend part of the increased disposable income on savings, so the initial increase in consumption is less than the tax cut. As a result, an increase in the state budget deficit financed by taxes has a greater impact on the growth of aggregate demand. This phenomenon was discovered by the Nobel Prize winner T.
Haavelmo. It got the name haavelmo's theorems... Its essence is as follows.

If growth in government spending is funded by growth income taxes, then the final increase in national income is equal to the initial increase in government spending. In this case, the multiplier of the balanced budget is equal to 1.

In the mechanism of the effect of changes in taxes on the level of GDP, the tax multiplier shows the net effect on the value of GDP of an increase in tax revenues by 1 dollar. However, changes in taxes are usually accompanied by changes in government spending. This combined effect on GDP reflects the government spending multiplier.

The multiplier establishes that an increase in government spending d (G), accompanied by an equal increase in tax revenues d (T), results in an increase in output (GDP). This phenomenon occurs with the simultaneous action of counter effects:

1. An increase in government spending (dG) leads to an increase in aggregate demand (dAD) by the same amount;

2. Increase in taxes (dT) reduces the level of consumer demand by a much smaller amount (including MPC), the drop in aggregate demand, taking into account disposable income, will be equal to MPC (Y-dT) + a \u003d MPC * Y (1 - t) + a.

Let's try to derive the value of the multiplier in a mathematical way.
We represent the aggregate demand function in the form

AD \u003d Y \u003d MPC * Y + a + I.

Let us introduce into its formula the mathematical values \u200b\u200bG, T, TR, which characterize the degree of state intervention in the country's economy. At the same time, net taxes are equal to T - TR (tax revenues minus social budget payments), and state procurements G are equal to government spending minus transfer payments TR:

Y \u003d MPC (Y - T + TR) + G + a + I.

Let's open the brackets and represent tax revenues to the budget as

T \u003d Y * t, provided that these are proportional taxes:

Y \u003d MPC * Y - MPC * t * Y + MPC * TR + G + a + I.

We collect together the terms of the function independent of Y, denote them by A
(autonomous consumption in the economy):

Y - MPC * Y + MPC * Y * t \u003d A + I, where A \u003d MPC * TR + a + I;

The expression 1/1-MPC (1-t) is multiplier of government spending.

The government spending multiplier has long been used in macroeconomic modeling, in particular in the Hicks – Samuelson business cycle model. The meaning of this model is to equalize the "waves" of cyclical fluctuations in the economy by regulating the amount of government spending by varying the tax rate of a proportional tax and changing the amount of government spending
(neo-Keynesian approach).

There are three ways to financing the budget deficit:

1) by additional emission of money;

2) at the expense of loans from the Central Bank;

3) through borrowing from the population and firms.

Each of these methods has its own pros and cons. The advantages of the first two are that their use makes it possible to avoid crowding out private investments by public ones, so business expenses and personal consumption will not decrease. However, their use is fraught with increased inflation.

There are three concepts balancing the budget :

1. The concept of annual balancing (Ricardianism). Economic entities proceed from the conviction that any debts must be repaid sooner or later. They perceive an increase in the state's debt as an increase in taxes in the future. the state has no other source of income other than taxes. State budget constraint:

Tnast. + Tbud. / (1 + i) \u003d Gset. + Gbud. / (1 + i).

The concept denies the positive effects of the stabilization fiscal policy. Thus, the growth of government spending does not lead to stimulation of aggregate demand due to the effect of crowding out investments. Reducing taxes does not lead to an increase in consumer spending, but leads to an increase in savings, since the subjects should be prepared to raise taxes in the future.

2. The concept of cyclical balancing. The admissibility of balancing the budget during the economic cycle is approved. Deficits during periods of recession help stimulate aggregate demand, and surpluses during periods of ups - to contain the "overheating" of the economy. This policy allows you to smooth the amplitude of cycle fluctuations by 30 - 35%.

3. The concept of functional finance. The problem of balancing the budget is seen as secondary, the task of stabilizing economic development is highlighted. Maintaining high employment takes priority. The growth of public debt will not lead to the threat of state bankruptcy, provided a well-oiled financial system and a high degree of trust in state institutions.

In the process of adopting and executing the budget, the balance of income and expenses is of great importance. If incomes exceed expenses, then there is a surplus. But more often than not, expenses exceed income. In this case, there is a deficit.

The budget deficit is due to various reasons. In some cases, the state may deliberately increase the budget deficit. In particular, in order to stimulate economic activity and aggregate demand during a period of production downturn, the government can make special decisions aimed at increasing employment (for example, financing programs to create new jobs) or significantly reduce taxes. As a result, budget expenditures increase or budget revenues decrease, and a deficit arises. But this deficit was deliberately created by the state. Such a deficit is called structural deficit.

Unlike structural cyclical deficit less dependent on the conscious fiscal policy state. It is due to the general decline in production that occurs at the stage of the crisis and is the result of the cyclical development of the economy. In the conditions of a decline in production, taxes and state revenues are reduced, which means that a deficit arises.

There are also active and passive deficits. An active deficit arises as a result of an excess of expenses over income, and a passive deficit as a result of a decrease in tax rates and other revenues, which is a consequence of a slowdown in economic growth, underpayments, etc.

Distinguish between short-term and long-term budget imbalances. The imbalance has shortnature, if the excess of expenses over income is limited to the framework of one financial year and is a reflection of changes in the macroeconomic situation in comparison with the one in which the budget was drawn up. This is mainly due to the lack of the necessary experience in macroeconomic forecasting, insufficient consideration of possible changes in a number of circumstances. For example, a reduction in budget revenues may occur as a result of a fall in export prices, a decrease in production volumes below the foreseen level, shifts in the structure of demand for manufactured products and a decrease in their competitiveness. An increase in the state budget deficit may also be caused by an unexpectedly sharp increase in government spending due to an increase in the inflation rate above the foreseen value, the expansion of transfer payments in combination with the introduction of tax incentives, which is a very popular measure before the next elections.

Long-term imbalance budget is associated with a widening gap between public spending and revenues over the years and is due to reasons that are more sustainable. Thus, in most developed countries over the past 15 years, there has been a steady trend towards an increase in the national budget deficit. This is due to the following factors:

• 1) an increase in the number of social payments, and hence the social burden on the budget;
• 2) an unfavorable demographic situation associated with an aging population, as a result of which the expenditures for the payment of pensions, allocations for health care, etc .;
• 3) liberalization of tax legislation and, as a consequence, a decrease in the value of tax rates (without a corresponding adjustment of government spending);
• 4) an increase in the volume of external debt.

In general, the state of the state budget is determined by three main factors:

• 1) a long-term trend in the dynamics of tax revenues and government spending;
• 2) the stage of the economic cycle in which the economy is in the period under review;
• 3) the current policy of the state in the field of budget expenditures and revenues.

Very often, especially in our country and in other countries, there is an artificial overestimation or underestimation of the true value of the budget deficit.

So, artificially lowering the budget deficit can be carried out using the following tools:

• 1) "tax amnesty", which allows taxpayers who previously evaded taxes, to pay at one time the entire amount equal to a certain part of the total tax collection;
• 2) measures to collect overdue tax payments;
• 3) introduction of temporary or added taxes;
• 4) deferrals of wage payments to public sector employees;
• 5) postponement of mandatory indexation of wages in accordance with the dynamics of the inflation rate;
• 6) sale of state assets;
• 7) the presence of a hidden deficit due to quasi-budgetary expenditures. The latter include centralized loans provided on favorable terms by the Central Bank. Besides, central bank can finance individual operations related to the national debt, cover losses from measures to stabilize the exchange rate, refinance agriculture, etc. As a result, the Central Bank's losses grow and inflation intensifies, while the deficit does not grow.

Artificial overestimation of the size of the state budget deficit may occur as a result of the following circumstances. First, when assessing the amount of government spending, depreciation in the public sector of the economy is not always taken into account. Secondly, servicing the public debt is an important item of government spending. However, very often the amount of interest payments on debt is overstated due to inflationary payments. At high inflation rates, when the differences in the dynamics of nominal and real interest rates are very significant, this overestimation of government spending can be quite significant. Situations are even possible when the nominal (official) deficit and public debt grow, while the real deficit and debt decrease, which significantly complicates the assessment of the government's policy. Therefore, when measuring the budget deficit, an inflation adjustment is required. With this amendment, determine real budget deficit, which is the difference between the nominal deficit and the interest rate on government debt multiplied by the inflation rate. The total budget deficit minus the inflationary part of interest payments is operating deficit.

It is believed that the existence of a budget deficit in itself is not yet a signal of economic distress. Often

the deficit is viewed as an important instrument of the state's economic policy, primarily of macroeconomic regulation. Skillful handling of this tool allows the state to solve a fairly wide range of economic and social problems. However, it should be borne in mind that a long-term imbalance in the budget can have a negative impact on the size of aggregate demand and income, the price level, and the state of the balance of payments. Therefore, the strategic goal for any state, of course, is a balanced budget.

There are different ideas about how and for how long to achieve a balanced budget. So, according to the theory of the annually balanced budget, which was widely used as theoretical basis state policy of most developed countries until the 30s. XX century., It is necessary to achieve equality of income and expenditure of the state annually. This, according to the proponents of this theory, allows national governments to pursue more responsible policies. The state lives within its means, does not accumulate debts, does not provoke inflation. If there is a decrease in income, then the state must either increase taxes or reduce costs. In conditions where they increase cash income, the state should act exactly the opposite, i.e. reduce taxes or increase costs. Currently, this theory is adhered to in practice by a limited number of countries, mainly countries with developing and transition economies.

In most developed countries, it is widespread in practice state regulation economy received the theory of cyclical balancing of the budget. The foundations of this theory were laid by J. Keynes in the 30s. Exactly keynesian theory rejected the need for an annual balanced budget. She effectively legalized budget deficits to stimulate the economy. The essence of the theory of cyclical budget balancing is that during an economic downturn, to stimulate economic growth, the state is obliged to cut taxes and increase spending. The government must compensate for the sharp drop in demand and prevent the decline in government spending. In this case, a budget deficit will inevitably arise. During the phase of economic recovery, the state pays off its debts by higher rates taxation or by increasing tax revenues of newly earned enterprises. Thus, by the end of the economic cycle, the budget becomes balanced. Balancing is carried out throughout the cycle: the surplus of budget funds in the recovery phase compensates for the budget deficit in the crisis phase.

In this case, a large role is assigned to "built-in stabilizers" ( progressive system taxation, transfer payments of the state - social payments, unemployment benefits, etc.). With their help, the size of aggregate demand is able to automatically decrease or expand depending on the phase of the cycle in the opposite direction to the movement of the conjuncture. For example, when a downturn in business activity as a result of a decrease in total income, there is an automatic reduction in tax revenues and an increase in certain types of transfer payments, which leads to the formation of cyclical deficits and partially compensates for the decrease in aggregate demand. In conditions of economic recovery, the opposite is happening - tax payments increase, transfer payments decrease.

In the framework of many modern theories, in particular the theory of a compensating budget, it is considered impossible and unnecessary to achieve its balance. Given that in modern conditions there are stable factors that increase the budget deficit, then it is necessary to use government credit as a legitimate source of budget revenues. It is government credit, according to the representatives of this theory, that is able not only to compensate for the gap between incomes and expenses, but also to attract an excess part of savings and invest it in the economy.

In most developed countries market economy the government seeks to balance the budget in the longer term - on a cyclical or functional basis. In an unstable economy, when the overall situation is less predictable, the government is forced to balance the budget every year. Therefore, it is no coincidence that the Budget Code of the Russian Federation states that the federal, regional or local budget cannot be adopted with a surplus or deficit; the budget must be balanced annually. This, of course, is a less efficient method, since it leads to a decrease in the degree of built-in stability of the economy, causes frequent fluctuations in tax rates, reduces investment activity, as well as the efficiency of income distribution. However, to some extent it is justified, since in an unstable economy the situation is less predictable.

In Russia, in accordance with the RF Budget Code, the State Duma can only adopt a balanced budget. Therefore, along with income items, the federal budget should include the deficit as a balancing item. At the same time, a special item “Expenses for servicing and repaying the public debt” is allocated in the expenditure side of the budget. This is how the Russian budget practice differs, for example, from the American one. In the United States, the budget can be adopted with a deficit, i.e. it is not inherently balanced. At the same time, the sources of debt repayment, as well as income from loans issued, received as debt repayment, were taken out of the budget.

In Russia, if a surplus is found, it is necessary:

• reduce the attraction of revenues from the sale of state or municipal property (for the federal budget - to reduce the attraction of revenues from the sale of state reserves and reserves);
• provide for the direction of budgetary funds for additional repayment of debt obligations;
• increase budget expenditures, including by transferring part of the revenues to budgets of other levels;
• reduce tax revenues.

There is such a thing as a primary surplus, which means the excess of income over spending, excluding the cost of servicing public debt.

If the budget for the next fiscal year with a deficit is adopted, it is necessary to determine the sources of financing the budget deficit.

The sources of financing the deficit differ across the levels of the budget system. So, the sources of financing the federal budget deficit are:

• 1) internal sources:
  • loans received by the Russian Federation from credit institutions in foreign currency

• government loans carried out by issuing securities on behalf of the Russian Federation;
• proceeds from the sale of state-owned property;
• proceeds from the privatization of state-owned organizations;
• receipts from the sale by the state of its shares in organizations;
• proceeds from the sale of state reserves precious metals and precious stones;
• 2) external sources:
  • government loans carried out in foreign currency by issuing securities on behalf of the Russian Federation;
  • loans from foreign governments, banks and firms, international financial organizations, provided in foreign currency.

The sources of financing the budget deficit of the constituent entity of the Russian Federation and the local budget can only be internal sources. Until 2001, to cover the budget deficit, constituent entities of the Russian Federation and municipalities had the right to attract external loans. But this negatively affected the overall value of the public debt. So, after 1997, when the regions for the first time received the right to independently place external loans (before that, external borrowings could be carried out by them only if a special presidential decree was adopted), in 1998 alone, four the largest regions - Moscow, St. Petersburg, Sverdlovsk and Nizhny Novgorod regions - Eurobonds for $ 1.2 billion were placed.In subsequent years, it was planned to place new foreign loans by more than 10 regions for the amount of over $ 3.5 billion.Thus, in a relatively short period of time, the amount of debt of the regions increased so much, and the real possibilities to repay them were so small that it was decided to prohibit the subjects of the Russian Federation and municipalities to independently engage in external borrowing.

To finance the budget deficit, constituent entities of the Russian Federation and municipalities can only use internal sources in the following forms:

• government loans carried out by issuing securities on behalf of a constituent entity of the Russian Federation or a municipality;
• budgetary loans received from budgets of other levels of the budgetary system of the Russian Federation;
• loans received from credit institutions;
• proceeds from the sale of property owned by subjects of the Russian Federation and municipal property;
• proceeds from the privatization of organizations owned by subjects of the Russian Federation and municipal property. The budget code of the Russian Federation sets the maximum size

deficit of budgets of different levels. Thus, the size of the federal budget deficit for the next financial year should not exceed the size of the oil and gas deficit of the federal budget.

In accordance with the Budget Code of the Russian Federation (Article 96), there is such a concept as a non-oil and gas deficit of the federal budget. It represents the difference between the volume of federal budget revenues excluding oil and gas revenues of the federal budget and revenues from the management of the Reserve Fund and the National Wealth Fund and the total volume of federal budget expenditures in the corresponding financial year.

The non-oil and gas deficit of the federal budget cannot exceed 4.7% of the gross domestic product forecasted in the corresponding financial year specified in Federal law about the federal budget for the next financial year and planning period. The non-oil and gas federal budget deficit is financed from the oil and gas transfer and sources of financing the federal budget deficit.

The size of the budget deficit of a constituent entity of the Russian Federation cannot exceed 15% of its budget revenues, excluding financial assistance from the federal budget. The exceptions are constituent entities of the Federation, in the budgets of which the share of interbudgetary transfers within two of the last three reporting financial years exceeded 60% of its own income (excluding subventions and subsidies from Investment fund RF). For such entities, the size of the deficit should not exceed 10% of the approved total annual income, excluding the amount of financial assistance.

If the law on the budget of the constituent entity of the Russian Federation approves the amount of proceeds from the sale of shares and other forms of participation in capital owned by the constituent entity of the Russian Federation, as well as a decrease in the balances on accounts for accounting for budgetary funds of the constituent entity of the Russian Federation, including funds from the Reserve Fund of the constituent entity of the Russian Federation, the deficit of a constituent entity of the Russian Federation may exceed the established limits within the amount of these receipts and a decrease in the balances of funds on accounts for accounting for the budget of the constituent entity of the Russian Federation.

The size of the local budget deficit cannot exceed 10% of the volume of local budget revenues, excluding financial assistance from the federal and regional budgets.

The exception is the municipalities, in the budgets of which the share of interbudgetary transfers for the last two of the last three financial years exceeded 70% of their own income (excluding subventions and subsidies from the Investment Fund of the Russian Federation). For such municipalities, the deficit should not exceed 5% of the approved total annual income, excluding the amount of financial assistance.

If the law on the budget of the municipality approves the amount of proceeds from the sale of shares and other forms of participation in capital owned by the municipality, as well as a decrease in the balances on the accounts for accounting for local budget funds, the deficit of the municipality may exceed the established limits within the amount indicated receipts and reducing the balances of funds on the accounts for accounting for local budget funds.

Moreover, revenues from sources of financing the local budget deficit can be used to finance only investment costs and cannot be used to finance the costs of servicing and repaying municipal debt.

If the sale of property is considered as a source of reducing the deficit of regional or local budgets, then, according to the Budget Code of the Russian Federation, the maximum size of the deficit of the respective budgets may exceed the specified limits, but not more than by the amount of proceeds from the sale of property.

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