ABSTRACT
This chapter offers a principle appropriate for national debt management. National debt management shall be taken to refer to any official action, by central banks as well as treasuries, designed to alter the quantity and kinds of a national government's debt obligations outstanding in private domestic hands. The net debt or the outstanding debt of a national government may be defined as those contractual obligations of a national government and its agencies. Agencies include all government corporations as well as the central bank. There are, however, a number of ways to explain the effect of government debt operations on private expenditures. One way relates debt change to the rate of interest and the rate of interest to national income through an investment schedule. An outstanding public debt will have a utility to a government regardless of the kind of commercial banking system, provided that banks operate under financial constraints.
