What are the '3 E's' of Government Debt?

The correct answer highlights the core principles that guide the management of government debt, namely Equity, Effectiveness, and Efficiency.

Equity refers to the fairness and impartiality in the distribution of debt responsibilities and obligations among various stakeholders, ensuring that the burden of debt does not disproportionately affect certain groups.

Effectiveness relates to how well the borrowed funds are utilized to achieve desired outcomes and objectives, ensuring that debt is not only incurred for its own sake but is directed towards initiatives that promote public welfare and enhance service delivery.

Efficiency focuses on the optimal use of resources, aiming to minimize waste and maximize output in the context of government borrowing. This means that the government should strive to ensure that the cost of servicing debt does not consume excessive resources that could be better used in other areas.

By understanding these three principles, stakeholders can better evaluate and manage government debt, ensuring that it contributes positively to the overall fiscal health and economic stability of the nation.