Budget surplus: positive or negative?

The budget surplus is a concept absolutely opposite to the deficit. That is, when the results of the country's economic activity are summed up over the past period, there is a significant excess of the revenue side over the expenditure side. This state of affairs is certainly encouraging, since a sudden surplus allows us to expand the state's reserve fund or implement important social programs.

In the modern economy, most countries in the world are familiar with the concept of deficits. After all, in conditions of a severe crisis, the budget surplus almost never arises. However, it can not be said that the excess of income over the expenditure of the balance in all cases is only positive. In accounting theory there is an unshakable rule that states that the totals of active and passive parts of any balance must be identical. A deviation in one direction or another from equality indicates an irrational distribution of the state budget.

It is worth noting the time of origin of the surplus. It can develop under the influence of natural factors or be created artificially, then the surplus state. Budget is only reflected in the balance sheet, but in practice there is a different picture. Artificial influence on the republican budget generates distortion of all its local forms, as they are directly interrelated.

The budget surplus is a state of the country's balance of payments, in which a certain amount of financial resources remains at the disposal of state bodies. Proper scheduling of temporarily free cash can provide a significant improvement in the well-being of the population and an improvement in the standard of living in the country. The government is trying to keep under control any changes in the financial market conditions, in order to prevent sudden jumps in the balance of supply and demand or to stop the monopoly of certain companies and even the industry. And to implement such manipulations, the state simply needs to have its own resource base.

The budget is considered one of the most important documents of the country, reflecting the main directions of monetary policy, and ways to achieve them. If the government understands that the available funds are not enough to implement socio-economic programs, then a budget surplus is formed and the strictest savings are introduced. In this case, the state influences each industry to increase the cash flow to the treasury. Achievement of the set goal is carried out at the expense of the basic levers:

• The system of taxation.
• Provision of loans to the state by the central bank.
• The maximum reduction in the expenditure part.

Of course, in the first place, the government will tighten the tax policy by raising the rates for certain types of activity or differentiating according to the income level of the population. When the increase in tax payments is not enough, one has to resort to saving and reducing the costs that go into securing state bodies - to apply the method of sequestration. And as a last resort it is possible to allocate crediting of the government. The National Bank provides loans on a fee basis even to the state, but at a minimum interest. The last lever is not sufficiently effective, as the funds received are subject to mandatory return, which can drive the state into a debt hole.

An important role is played by which budget is proficient. For example, in Russian practice, for a few consecutive years, the republican budget surplus has been observed, but due to a significant shortage of local and regional budgets, the final or consolidated balance is obtained with a negative balance.