National debt, also known as national public debt, is the relationship between the creditor's rights and the debtor's rights formed by the state, based on its credit and according to the general principle of debt, by raising funds from the society.

National debt is a bond issued by the state. It is a government bond issued by the central government to raise financial funds. It is a credit and debt certificate issued by the central government to investors that promises to pay interest and repay principal at maturity. Since the issuing subject of national debt is the state, it has the highest credit rating and is recognized as the safest investment tool.

National debt is the main form of national credit. The purpose of the central government's issuance of national debt is often to make up the national fiscal deficit, or to raise funds for some expensive construction projects, as well as some special economic policies and even wars. As the central government's tax is used as the guarantee for repaying the principal and interest, the national debt has low risk, strong liquidity and lower interest rate than other bonds.

There are two kinds of national debt. One is the voucher type national debt, which has a higher interest rate than the deposit rate in the same period. Similar savings are better than savings, so it is called "savings type national debt". Another kind of national debt is bookkeeping national debt, also known as paperless national debt. At present, it is mainly traded through stock exchanges, and can be bought and sold like stocks.

Compared with the voucher type national debt, the yield and liquidity advantages are obvious: the interest rate of the bookkeeping type national debt is higher than the voucher type national debt; As the book entry national debt can be listed and circulated, it can not only obtain fixed interest, but also gain income from price difference by buying low and selling high. National debt transaction is a net price transaction. Bookkeeping national debt is a net price transaction. The net price does not include interest. The actual transaction price is the sum of the net price and accrued interest. The net price is the displayed price we see through the exchange quotation system.

National debt is a special form of debt, which has the following characteristics compared with the general debt relationship:

(1) From the perspective of the subject of legal relationship, the creditor of national debt can be either a citizen, legal person or other organization at home and abroad, or a government of a country or region or an international financial organization, while the debtor can generally only be a country.

(2) From the nature of the legal relationship, the occurrence, change and elimination of the legal relationship of national debt more reflects the unilateral will of the state. Although compared with other financial legal relationships, the legal relationship of national debt is an equal legal relationship, but compared with the general creditor's rights and debt relationship, it reflects a certain subordination, which is more obvious in the legal relationship of national internal debt.

(3) From the perspective of the realization of legal relationship, national debt is the creditor's right and debt relationship with the highest credit rating and the best security.

The purpose of issuing national debt is as follows:

1. During the war, war bonds were issued to raise military expenditure. During the war, the amount of military expenditure was huge. In the absence of other financing methods, funds were raised by issuing war bonds. Issuing war bonds is a common way for governments of all countries in wartime, and it is also the first origin of national bonds.
2. To balance the national revenue and expenditure and make up the fiscal deficit, we issue deficit national debt. Generally speaking, we can balance fiscal revenue and expenditure by increasing taxes, issuing more currency or issuing national debt. Compared with the above three methods, the tax increase is a good way to take from the people for their own use. However, the tax increase has certain limits. If the tax is too heavy, which exceeds the affordability of enterprises and individuals, it will not be conducive to the development of production and will affect future tax revenue. The issuance of additional currency is the most convenient method, but this method is the least desirable, because the use of additional currency to compensate for fiscal deficits will lead to serious inflation, which has the most dramatic impact on the economy. It is a feasible measure to issue national debt to cover the fiscal deficit when it is difficult to increase taxes and cannot issue more currency. By issuing bonds, the government can absorb idle funds from units and individuals and help the country tide over financial difficulties. However, the issuance of deficit national debt must be moderate, otherwise it will also cause serious inflation.
   
   
3. The state issues construction treasury bonds to raise construction funds. The state needs a large amount of medium - and long-term funds for infrastructure and public facilities construction. By issuing medium - and long-term national debt, a part of short-term funds can be converted into medium - and long-term funds for the construction of large national projects to promote economic development.
   
   
4. To issue borrowed and exchanged national debt for repaying matured national debt. In the peak period of debt repayment, in order to solve the problem of the source of funds for debt repayment, the state issues borrowing bonds to repay old debts that are due, "which can reduce and disperse the debt repayment burden of the state.