Why should a proactive fiscal policy issue additional treasury bonds?

It is used to expand demand and stimulate the economy.

Although the national fiscal revenue and expenditure situation is grim, in the case that banks have a lot of "deposits", abundant funds and enterprises are cautious in lending due to the strengthening of the restraint mechanism, finance can achieve the purpose of expanding demand and stimulating the economy by implementing a proactive fiscal policy focusing on moderately expanding the national debt policy.

On August 29th, the Fourth Session of the Ninth NPC Standing Committee adopted "the State Council's Proposal on Submitting for Review the Plan (Draft) of the Ministry of Finance to Issue Treasury bonds this year to speed up infrastructure construction and adjust the central budget", and decided that the Ministry of Finance would issue 6,543.8 billion yuan of treasury bonds to state-owned commercial banks, which would be used exclusively for infrastructure construction and never for general industrial projects.

Extended information The short-term behavior of national debt that once existed in China's national debt work is mainly manifested in the following aspects:

First, the fund-raising behavior is short-term, which is embodied in the short term and high interest rate of national debt, and the advantages of gilt-edged bonds of national debt have not been fully exerted.

Second, the design of the national debt issuance mechanism is unreasonable. At present, the issuance mechanism of national debt is: the issuance scale of the current bond = deficit of the current year+debt service of the current national debt+interest service of the current national debt.

This mechanism is not designed from the perspective of national debt as an important means of national macro-control under the condition of market economy, but only from the perspective of solving temporary financial difficulties, which is not conducive to the control and management of fiscal expenditure, has no self-discipline effect on fiscal deficit control, loses restraint on the expansion of national debt scale, and easily leads to blind expansion of national debt scale.

Third, the allocation and use of national debt funds are invested in consumption. In distribution, we should pay more attention to consumption (only to make up the deficit) rather than development, and pay more attention to immediate interests rather than long-term interests. In use, direct benefit is emphasized, social benefit is ignored, short, flat and fast project construction is emphasized, and public utilities development and infrastructure construction are ignored, which leads to excessive debts in infrastructure development and affects the sustained, rapid and healthy development of the national economy.

Baidu Encyclopedia-Proactive Fiscal Policy