Mathematica Eterna
Open Access

Abstract

Requirements for a Country with a Fiscally Sound Central Government

Hiroshi Obata*

This study demonstrates the financial soundness of a model country’s central government and considers the present day as the starting point. Fiscal soundness is determined by the following criteria: (1) During and after the starting point, the central government can generate the necessary funds for executing budgeted items and there is never a situation in which the central government lacks the funds to maintain its finances and (2) even if the central government is in debt at the starting point, it presents no problem regardless of the amount of the debt. This demonstration is based on pure logic using mathematical induction in a model country that is very similar to a real country. In the discussion, we derive the required and initial conditions for the country to which this demonstration applies. Moreover, solutions to the problems caused by inflation are discussed. In conclusion, it is possible for a country with a financially sound central government to exist in the above two meanings.

Published Date: 2023-12-08; Received Date: 2023-11-03