708 B
708 B
Unfunded Debt
Definition
Debt obligations that are contracted without being backed by specific funds or revenues set aside for their repayment, typically consisting of short-term obligations and arrears that must be paid from current revenues or new borrowing.
Source Chapter
Book V, Chapter 3
Context
Smith distinguishes between funded and unfunded debt as two methods by which governments contract debt, with unfunded debt being the first resort when governments borrow without creating dedicated revenue streams for repayment.
Economic Domain
Regulation