Public debts

Occasionally, authorities have taken draconian steps to retrofit an existing city. The redevelopment of Paris by the prefect of the Seine, Baron Haussmann, under Louis Napoleon was a grandiose public works program stretching from 1853 to 1869. Haussmann s vast scheme absorbed unprecedented amounts of public debt, uprooted tens of thousands of people, and could have been accomplished only by a single executive authority not directly accountable to the electorate. 

Functions are used extensively in everyday life. Consider the following two data tables. Table 3.4 gives the US national public debt, in billions of dollars, for the years 1978 through 1997. Table 3.S presents the major exports of several countries in Europe. 

The public debt tabic is an example of a Junction, while the major export table is not. 

Let / denote the US national public debt function presented in Table 3.4. The fact that in 1985 the US public debt was 1945.9 billion dollars can be represented by /(1985) = 1945.9. The notation /(1997) = 5413.1 indicates that the public debt in 1997 was 5413.1 billion dollars. 

In this section, many examples of functions were given. In particular, we studied correspondences motivated by real data (e.g., the US national public debt). Look in a newspaper, magazine, or other source and find two examples of a correspondence that results in functions. For each example you find, indicate what correspondence the function is establishing, whether the function is one-to-one, onto, or both, and what the domain and range of the function are. 

Defining. In this section, many examples of correspondences were given. In particU lar, we studied correspondences motivated by real data (the US national public debt... 

For the US national public debt, the function / that is being represented corresponds each year to the size, in billions of dollars, of the US national public debt that year. In other words, dom(/) is the years from 1978 to 1997 or 1978,1979,1980,..., 1997 and the ran(/) is the set of numerical values between 0 and 6000 (billions of dollars). Each unit on the horizontal axis corresponds to one year. Each unit on the vertical axis corresponds to 1000, and each number indicates billions of dollars. 

Despite our focus on the public debt markets, banks still provide the bulk of corporate Europe s credit needs. Bank loans to commercial and industrial borrowers in Europe total 3,000 billion, compared to 651 billion of public fixed-rate investment grade debt. 

The example of Japan, in the recent past, is one of a country that has suffered from unexpected disinflation and now deflation. This has resulted in an unanticipated real wealth transfer from issuers of nominal bonds to investors, resulting in a windfall loss to the government and windfall gains for investors. Had it issued inflation-linked JGBs, this would have tempered the escalation in Japan s public debt/GDP ratio a little. The unique economic structures and circumstances might not make Japan a particularly persuasive comparison to apply to other economies, the intention is simply to illustrate the risks of the unexpected. 

The US quarter has a mass of 5.67 g and is approximately 1.55 mm thick, (a) How many quarters would have to be stacked to reach 575 ft, the height of the Washington Monument (b) How much would this stack weigh (c) How much money would this stack contain (d) The US National Debt Clock showed the outstanding public debt to be 11,687,233,914,811.11 on August 19, 2009. How many stacks like the one described would be necessary to pay off this debt ... 

Foresi, S., A. Penati, and G. Pennacchi. 1997. Reducing the Gost of Government Debt The Role of Index-Linked Bonds. In de Cecco, M., L. Pecchi, and G. Piga, eds. Public Debt Index-Linked Bonds in Theory and Practice. Cheltenham Edward Elgar. 

I suppose that the received opinion, that the public debts of one generation devolve on the next, has been suggested by our seeing habitually in private life that he who succeeds to lands is required to pay the debts of his ancestor or testator, without considering that... 

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any... 

Over the next 20 years, the Itaipu debt would be restructured and refinanced many times as inflation in Brazil and global financial crises altered conditions in major financial markets. By 2006 the foreign debt had been retired completely, and the remaining debt for the construction of Itaipu, equal to some US 20 billion, was internal public debt in Brazil, as shown in Table 92.3. 

The U.S. government offers bills, notes, and bonds to the public through regularly scheduled auctions. The Treasury announces the size of the offering in a press release about a week before the auction, and the news usually appears in all of the financial publications and news broadcasts. If you use the Public Debt web site, you will be informed of the auctions at the time the news release goes out. 

The Public Debt web site is the most comprehensive, efficient Treasury security investment platform available to individual investors today. 1 cannot stress the value and facility that have been created by the government with the use of this web site. Any questions or inquiries concerning any of the issues can be sent electronically and someone will get back to you promptly (they did for me). You can manage your investments neatly online, and periodically review your portfolio. Even if you already have a live broker, or an account with any of the online brokerage firms, 1 strongly urge you to open an account with the Public Debt online. You ll be glad you did. 

This chapter overviews the leading online brokerages available to investors most notably MuniDirect and Public Debt Online. One sells municipal bonds, and the other, U.S. Treasuries (and even savings bonds). Since these categories are the two that individual investors concentrate on most when contemplating purchasing bonds directly for their portfolios, I feel that they would be of extreme value for you to consider. 

Public Debt Online is at http //www.publicdebt.treas.gov. That s right, this is a. gov site—perhaps the only one that is mentioned in this book that offers transactions. On this site, you can buy, direct from Uncle Sam, U.S. savings bonds (remember them ) as well as U.S. Treasury bills, notes, and bonds. (See Figure 9.2.)... 

TreasuryDirect, a book-entry securities system operated by the Bureau of the Public Debt program, is designed for investors who purchase Treasury bills, notes, and bonds and intend to hold them until maturity. Under TreasuryDirect, individual investors maintain accounts directly with the Treasury. (See Figure 9.3.)... 

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