Research On Local Government Debt Risks

Our country" budget law" and other relevant laws and regulations, the local governments ’ borrowingbehaviors, have very strict rules, the local government shall not issue bonds, but in reality, the provinciallocal government still take a variety of other ways to raise funds, and thus produce a large number of localgovernment debt. Especially in the08years after the financial crisis, our country in order to stimulate theeconomy, has adopted a proactive fiscal policy and monetary policy. Admittedly, local government debt hascertain necessity, moderate debt can make up for the lack of fiscal expenditure, can improve theenvironment of investment, promote economic development, and to some extent to improve the people’slivelihood, optimizing the ecological environment plays a positive role. However, if used improperly, mayalso lead to debt risk. From2011the audit report disclosure of the situation, our province, city, county threeclass local government debt has reached10more than1trillion, increase the rate of shocking. The rapidgrowth of local government debt, if not treated seriously, will likely lead to China’s economic" hardlanding". And along with the adjustment of national policy, in the center of the credit and real estate marketgradually tightened, may lead to local governments defaulting. Once the crisis started, whether these debtultimately by the central finance fill, or the banks of the local debt turned bad, or through the issuance ofbanknotes to modest dilution, the ultimate victims are civilians.Therefore, in order to avoid and control of local debt expansion may lead to a variety of risks, we mustpay attention to the issue of local government debt. This paper mainly with normative analysis as the mainmethod, in the extensive reading and collection of classic economy school, Keynes school, the Marxdoctrine and the theory of public finance in the government debt issues in the theoretical research results,add to our country local government debt comprehensive, multi-angle data analysis, expounds somealthough LRG the necessity, but still need to strengthen the supervision of government debt. The localgovernment debt problem, has developed into a worldwide problem, many countries are trying to solve theproblems and effective measures and methods of prevention. To our country, to prevent and resolve thedebt risk of local government, is affecting the national economy, and even the society the smooth runningof the event, we must combine Chinese national condition, at the same time, learn from other countriesadvanced management experience. On the research content, the debt risk of local government on the basis of theoretical analysis,combined with China’s local government debt situation, summed up the current our country localgovernment debt problems, these problems which the risk performance, to our country economydevelopment, society what kind of impact, then pertinently pointed out the local government debt risk inChina the cause of the problem, and with the foreign government debt risk management lessons, draws itsinspiration. Finally, put forward preventing and reducing the local government debt related suggestions..