What are the 3-Es of government debt?

The 3-Es of government debt refer to the principles that guide the effective management and accountability of public finances. The correct response identifies these principles as Equity, Efficiency, and Effectiveness.

Equity means addressing fairness in the allocation of resources and ensuring that the benefits and burdens of debt are distributed justly among different segments of the population. This principle evaluates how debt affects various stakeholders, particularly the most vulnerable, reflecting the government’s responsibility to uphold social justice.

Efficiency pertains to the optimal use of resources in debt management. It emphasizes minimizing waste and ensuring that borrowed funds are used in a way that maximizes outcomes relative to costs. Efficient debt management strives to achieve the desired public services with the least financial strain, thus promoting sustainable fiscal practices.

Effectiveness focuses on the extent to which government debt serves its intended purpose of funding public programs and initiatives. It involves assessing whether the outcomes of borrowed funds align with governmental objectives and public expectations, ensuring that debt financing contributes positively to economic and social well-being.

The other options do not accurately reflect the commonly recognized 3-Es framework related to government debt and do not encompass the essential components necessary for responsible debt management. Understanding these principles is crucial for policymakers and public finance professionals to ensure that government borrowing is conducted