Treasury Bonds And The National Debt

After watching the video " Ten Trillion and Counting", I found that the United States borrows money from China, Japan, Europe, and even Saudi Arabia. Borrowing money is something that the government shouldn't rely on for the incoming years because it has the chance of leading to national depression. They continuous borrowing from other countries will leave an immense debt to be payed off. When expenses increase the income yearly then a deficit will run. If those deficits add up then it will turnout as a debt. Although this is a lot money, most of that money is controlled by foreigners. Foreign countries are the highest holders of debt that the U.S. is against. "At the end of April, China alone held $1.1525 trillion of U.S. debt, and all foreign nations combined held over $4.4 trillion, about half of the total public debt. The remainder is split between a wide variety of businesses and individuals around the country and the world (Gofman)." America is low on taxes that and the way balance that problem is to have lend some money.

The Budget and Economic Outlook: Fiscal Years 2010 to 2020. N.p., 2010. Web. 18 Jan. 2014. .

Due to the enormous expense of fighting the revolutionary war, America was in debt as soon as it became a country. Both the national and state governments had accumulated large amounts of debt in the war effort. As the first secretary of the treasury, Hamilton had the responsibility of paying off the national debt, which was about $11.7 million to other countries and about $40.4 million to U. S. private citizens. In addition to the national debt, the state governments had also accumulated around $25 million of debt. In order to raise money during the war, the United States government sold bonds with the promise of buying back the bonds at a higher rate in the future. However, following the war the government was unable to fulfill that promise to the bond holders.

The United States borrows money from individuals that have bought Treasury Bills, Notes, Bonds, and United States Savings Bonds. The U.S. government also borrows money by issuing Treasury securities. These securities finance expenditures that exceed its receipts, and are legal under the authority of the Second Liberty Bond Act. The government's primary source of income is through taxes paid by its citizens. Supposedly, money is spent on programs that government officials consider necessary to ensure the best quality of life for all (or at least the majority) of the nation's citizens. The combination of these amounts is what makes up the national

The largest debt holders (entities to which the federal government owes money) of the public debt are foreign governments and investors (about $6 trillion), the US Federal Reserve ($2.5 trillion), various mutual funds (about $1 trillion), and state or local governments ($800 billion) [7]. The remaining one-third of the debt is classified as intragovernmental holdings, which are accumulated when the Treasury borrows from trust funds financing specific government programs for use in the general budget [6]. For example, the Social Security ran a surplus while the baby boomers were in their working prime and tax revenue was high, so the government has historically been able to borrow from the Social Security and Disability Trust Funds to pay for other expenditures [8]. As a result, Social Security is the single largest stakeholder in the national debt holding securities worth $2.8 trillion. Other government accounts that are owed money include the Office of Personnel Management and the Military Retirement Fund

The U.S. national debt is currently $18 trillion dollars and it is rising fast. The national debt today is the highest the U.S. has ever seen. In George Washington’s Farewell Address, he declared the U.S. should avoid going into debt. If the nation end up in a deficit, that the debtors were responsible for paying off the debt so that it doesn’t burden the future generations. Like the rest of this advice in his Farewell Address, the nation ignored it. The ideal goal right now should be to stop the debt from increasing anymore because it is impossible to stop the debt from increasing and expect to pay it off in this generation.

Currently, the United States owes approximately $19 trillion in National Debt. It is owed to Mutual funds, pension funds, foreign governments, foreign investors, American investors and many others. From the year 1959 to 2015, the United States debt has gone up by around 7554% from the debt in 1959 starting at $285 billion. The debt itself has increased by around 9 trillion since Barack Obama has taken the Presidential office in 2009. Everything has been done to increase national debt, but nothing has been made to reduce the national debt.

Many Americans today are aware that the United States is in debt, however, some may not realize by how much. Currently, the United States National Debt is up to 18 trillion dollars and is steadily increasing. This is a serious problem for the U.S., especially for millennials, who are going to be the ones living and dealing with the debt left behind for them. Increased spending, borrowing from China, and interest on the money borrowed are setting up our economy for an eventual crash, one that the upcoming generation may not be prepared for. Every dollar that accumulates into the debt will have to be repaid with interest at some point, making it harder to pay back. To gain a better understanding of how the U.S. dug itself into such a deep hole, one should start at the beginning of where the debt started.

As with most loans, the US national debt comes with an interest. Interest paid for the debt in 2009 is $383 billion dollars, or about 20 percent of the country’s total tax revenues (“Financial Audit: Bureau of the Public Debt’s Fiscal Years 2009 and 2008 Schedules of Federal

With all this debt, it begs to question. To who and what does the United States owe all this money? According to the “National Priorities Project”, 34 percent of the debt is owned by foreign countries, like China and Japan, 28 percent by federal accounts, and the remaining 38 percent is owned by other investors or local governments. Ever since the United States was founded, it owed money to the foreign investors and it has only continued to pile up.

Many investors believe that this means the United States will have problems repaying these loans in the future and will cause many economic problems in the future. The debt accumulated this much because of deficits in the national budget. These can be caused by new programs to help citizens or help the US economy. Tax cuts, military spending, and the economic stimulus package caused this national debt to skyrocket. On the USdebtclock.org website it shows our largest budget items are Medicare/Medicaid at $1 Trillion, Social Security at $886 Billion, defense/war at $583 Billion, income security at $303 Billion, net interest on debt at $224 Billion, and Federal pensions at $255 Billion.(usdebtclock1) These debts are large and spending on some of these programs must be cut.

Each year United States, China, Mexico, Germany and other countries come out with an annual budget that would include taxes and social security programs. Some countries will have failed keeping up with their money that they have to make up by getting treasury bills. This will allow the government to collect cash from institutional investors and the government will be able to continue to spend money on other programs. The top reasons behind national debt include health care programs, social security programs, unemployment, and immigrants.

The National Debt consists of the total debt accrued by local, state and federal. Public debt is essentially the federal debt, thus compiling the staggering number that already exists. The debt deficit to me is astonishing. Currently, the total public debt in the United States, as of December 16, 2015, is $18,788,138,221,346.49. This includes $13,600,726,418,253.26 debt held by the public and $5,187,411,803,093.23 by intergovernmental holdings (usgovermentdebt, 2015). High GPD is not anything new to the United States. The all-time high was 121.70 percent ($18827323.00) in 1946 and a record low of 31.70 ($253400.00) percent in 1974 (United States Government Debt to GDP, 2015). The way we are spending, and the debt we are accruing, it would

Before we answer the first question, we must need to know what a “Government Bond” is. It is a debt security issued by a government to support government spending, most often issued in the country's domestic currency. Federal government bonds in the United States include: the savings bond, Treasury bond, Treasury inflation-protected securities (TIPS), and others. In my opinion, there are three main reasons for this question.

Throughout most of the country’s history, the United States’ federal government maintained a reasonable level of national debt. For example, the total national debt in 1981 was $998 billion. Since then, however, the government has generated significant budget deficits, and the level of debt has risen to $16.7 trillion in 2013 (Calleo, 39). Budget deficits are caused