Editing Fiscal policy (section)

==Methods of fiscal policy funding==
Governments [[government expenditure|spend money]] on a wide variety of things, from the military and police to services such as education and health care, as well as [[transfer payment]]s such as [[welfare spending|welfare]] benefits. This expenditure can be [[revenue|funded]] in a number of different ways:
* [[Taxation]]
* [[Seigniorage]], the benefit from printing [[money]]
* [[Debt|Borrowing]] money from the population or from abroad 
* Dipping into fiscal reserves
* [[Sales|Sale]] of [[fixed asset]]s (e.g., [[Real estate|land]])
* Selling equity to the population

=== Borrowing ===
A fiscal deficit is often funded by issuing [[Government bond|bonds]] such as [[Treasury bills]] or and [[gilt-edged securities]] but can also be funded by issuing equity. Bonds pay interest, either for a fixed period or indefinitely that is funded by taxpayers as a whole. Equity offers returns on investment (interest) that can only be realized in discharging a future tax liability by an individual taxpayer. If available government revenue is insufficient to support the interest payments on bonds, a nation may [[Default (finance)|default]] on its debts, usually to foreign creditors. [[Government debt|Public debt]] or [[Government budget balance|borrowing]] refers to the government borrowing from the public. It is impossible for a government to "default" on its equity since the total returns available to all investors (taxpayers) are limited at any point by the total current year tax liability of all investors.

=== Dipping into prior surpluses ===
A fiscal surplus is often saved for future use, and may be invested in either local currency or any [[financial instrument]] that may be traded later once resources are needed and the additional debt is not needed.

=== Fiscal straitjacket ===
The concept of a fiscal straitjacket is a general economic principle that suggests strict constraints on government spending and public sector borrowing, to limit or regulate the budget deficit over a time period. Most US states have balanced budget rules that prevent them from running a deficit. The United States federal government technically has a [[United States debt ceiling|legal cap on the total amount of money it can borrow]], but it is not a meaningful constraint because the cap can be raised as easily as spending can be authorized, and the cap is almost always raised before the debt gets that high.