The national debt of the United States is the public debt carried by the United States federal government, which is measured as the nominal value of the currently outstanding Treasury securities issued by the Treasury and others. federal government agencies. The terms national deficit and national surplus typically refer to the balance of the federal government budget from year to year instead of the cumulative amount of debt. Year deficits increase debt, while surplus years reduce debt because more money is received than what is spent.
There are two components of gross national debt:
- Publicly held debt , such as Treasury securities held by investors outside the federal government, including those owned by individuals, corporations, Federal Reserve Systems, and foreign, state and local government.
- Debt held by a government account or an intrinsic debt , is a non-marketable Treasury securities stored in a federal government-administered program account, such as the Social Security Trust Fund. Debt held by government accounts represents a cumulative surplus, including interest income, from various government programs that have been invested in Treasury securities.
In general, government debt increases as a result of government spending, and decreases from taxes or other receipts, both of which fluctuate during the fiscal year. In practice, Treasury securities are not issued or redeemed on a daily basis, and may also be issued or exchanged as part of federal government macroeconomic management operations.
Historically, US public debt as part of gross domestic product (GDP) increased during the war and recession, and then declined. Debt to GDP ratio may decrease as a result of government surplus or due to GDP growth and inflation. For example, the debt held by the public as part of GDP peaked just after World War II (113% of GDP in 1945), but then fell for the next 35 years. In the last few decades, aging demographics and rising health care costs have caused concerns about the long-term sustainability of the federal government's fiscal policy. Aggregate, the gross amount borrowed by the Treasury is limited by the US debt ceiling.
On April 30, 2018, publicly held debt was $ 15.3 trillion and intragovernment holdings of $ 5.7 trillion, for total or "National Debt" of $ 21 trillion. The debt held by the public is about 77% of GDP by 2017, ranking the 43rd highest of 207 countries. The Congressional Budget Office estimates in April 2018 that the ratio will increase to nearly 100% by 2028, possibly higher if the current policy is extended beyond the scheduled expiration date. In December 2017, $ 6.3 trillion or about 45% of publicly held debt was owned by foreign investors, the largest being China (about $ 1.18 trillion) then Japan (about $ 1.06 trillion).
Video National debt of the United States
History
The United States Government continues to have fluctuating public debt since its formation in 1789, except for about one year during 1835-1836. To allow comparison over the years, public debt is often expressed as a ratio to gross domestic product (GDP).
US public debt as a percentage of GDP reached the highest level during Harry Truman's first presidential term, during and after World War II. Public debt as a percent of GDP declined rapidly in the post-World War II period, and reached its lowest point in 1974 under Richard Nixon. Debt as a share of GDP has increased consistently since then, except during the presidency of Jimmy Carter and Bill Clinton.
Public debt increased sharply during the 1980s, when Ronald Reagan slashed tax rates and increased military spending. It fell during the 1990s, as military spending declined, tax increases and the 1990s boom. Public debt rose sharply amid the 2007-2008 financial crisis and significant tax revenues decreased and expenditures increased.
Maps National debt of the United States
Assessment and measurement
Public and government accounts
On April 30, 2018, publicly held debt was $ 15.3 trillion and intragovernment holdings of $ 5.7 trillion, totaling $ 21 trillion. The debt held by the public is about 77% of GDP by 2017, ranking the 43rd highest of 207 countries. The Congressional Budget Office estimates in April 2018 that the ratio will increase to nearly 100% by 2028, possibly higher if the current policy is extended beyond the scheduled expiration date.
National debt can also be classified into marketable or non-marketable securities. Most of the securities are Treasury notes, bills, and bonds held by investors and governments globally. Non-marketable securities are primarily "series of government accounts" owned by certain government trust funds such as the Social Security Trust Fund, which represents $ 2.74 trillion in 2011.
Non-salable securities represent the amounts paid to program beneficiaries. For example, in the case of the Social Security Trust Fund, the payroll taxes dedicated to Social Security are credited to the Trust Fund upon receipt, but are spent for other purposes. If the government continues to deficit in other parts of the budget, the government must issue debts held by the public to finance the Social Security Trust Fund, which essentially exchanges one type of debt to another. Other large intragovernmental holders include the Federal Housing Administration, the Federal Loan Resolution Fund and the Loan and the Federal Hospital Insurance Trust Fund (Medicare).
Accounting treatment
Only publicly owned debt is reported as liability to the United States government consolidated financial statements. Debts held by government accounts are assets for those accounts but are liabilities to the Ministry of Finance; they balance each other in the consolidated financial statements.
Government receipts and expenditures are usually presented with cash rather than as an accrual basis, although the accrual basis may provide more information about the long-term implications of the government's annual operations. United States public debt is often expressed as the ratio of public debt to gross domestic product (GDP). The debt-to-GDP ratio may decline as a result of government surplus as well as due to GDP growth and inflation.
Obligations of Fannie Mae and Freddie Mac are excluded
Under normal accounting rules, wholly owned companies will be consolidated into the books of their owners, but the large size of Fannie and Freddie has made the US government reluctant to include Freddie and Fannie in his own books. When Freddie Mac and Fannie Mae needed a bailout, White House Budget Director Jim Nussle, on September 12, 2008, initially indicated their budget plan would not include GSE debt into the budget due to the temporary nature of the conservator's intervention. When the intervention was dragged out, the experts began to question further the accounting treatment, noting that the change in August 2012 "made them a more permanent country than the state and changed the government's favored share into a permanent type of permanent security."
The Government controls the Public Accounting Supervisory Board, which usually criticizes inconsistent accounting practices, but does not oversee its own government accounting practices or standards set forth by the Federal Accounting Standards Advisory Board. The on-or off-balance sheet obligations of the two independent GSEs were just over $ 5 trillion at the time the conservatory was enforced, consisting primarily of mortgage payment guarantees and agent bonds. The confusing, government-controlled, independent state of the GSE has resulted in investors from common stock and preferred stocks launching activist campaigns in 2014.
Guaranteed liability is excluded
US federal government guarantees are not included in the total public debt, until there is a call for bail. For example, the US federal government at the end of 2008 guaranteed a large number of mutual fund, bank and corporate liabilities under several programs designed to address the problems arising from the financial crisis of the late 2000s. The guarantee program expires at the end of 2012 when Congress refuses to extend the scheme. Direct investment funding made in response to the crisis, such as those created under the Troubled Asset Assistance Program, is included in the debt.
Unfunded liability is excluded
The US government is obliged under current law to make compulsory payments for programs such as Medicare, Medicaid, and Social Security. The Government Accountability Office (GAO) projects that payments for these programs will significantly exceed tax revenues over the next 75 years. Medicare Part A payments (hospital insurance) already exceed program tax revenues, and social security payments exceed payroll taxes in fiscal year 2010. This deficit requires funding from other sources or tax loans. The present value of this deficit or unfunded liabilities is about $ 45.8 trillion. This is the amount that should be set aside in 2009 to pay unfunded obligations which, under current law, should be filed by the government in the future. Around $ 7.7 trillion is related to Social Security, while $ 38.2 trillion is linked to Medicare and Medicaid. In other words, a health care program will require almost five times as much funding than Social Security. Adding this to the national debt and other federal obligations will bring total liabilities to nearly $ 62 trillion. However, these unfunded liabilities are not counted in national debt, as shown in the monthly Treasury report of national debt.
Measure debt burden
GDP is a measure of total size and economic output. One measure of debt burden is its relative to GDP, called the "debt to GDP ratio". Mathematically, this is debt divided by the amount of GDP. The Congressional Budget Office includes the historical budget and debt tables and their annual "Budget and Economic Outlook". Debt held by the public as a percentage of GDP rose from 34.7% of GDP in 2000 to 40.5% in 2008 and 67.7% in 2011.
Mathematically, that ratio can be reduced even as debt grows if the rate of increase in GDP (which also takes into account inflation) is higher than the rate of increase in debt. Conversely, the ratio of debt to GDP may increase even when debt is being reduced, if a decline in GDP is sufficient.
According to the CIA World Factbook , during 2015, the ratio of debt to US GDP of 73.6% is the 39th highest in the world. This is measured using "debt held by the public." However, an additional loan of $ 1 trillion since the end of FY 2015 has increased the ratio to 76.2% as of April 2016 [See Appendix # National debt for certain years]. Also, this number does not include state and local debt. According to the OECD, the gross debt of the general government (federal, state and local) in the United States in the fourth quarter of 2015 is $ 22.5 trillion (125% of GDP); reducing $ 5.25 trillion for intergovernmental federal debt to calculate only federal "federal debt" that gives 96% of GDP.
The ratio is higher if total national debt is used, adding "intragovernmental debt" to "debt held by the public." For example, on April 29, 2016, debt held by the public was about $ 13.84 trillion or about 76% of GDP. Intra-government holdings totaled $ 5.35 trillion, giving a combined total public debt of $ 19.19 trillion. US GDP for the previous 12 months was around $ 18.15 trillion, for a total debt-to-GDP ratio of about 106%.
Calculates the annual change in debt
Conceptually, the annual deficit (or surplus) should represent a change in the national debt, with the deficit adding to the national debt and surplus reducing it. However, there is a complexity in budget calculations that can make the deficit rate commonly reported in the media ("total deficit") far different from the annual increase in debt. The main categories of difference are the treatment of Social Security programs, Treasury loans, and additional allocations beyond the budget process.
The Social Security benefits payment and payment tax, together with the net balance of the US Postal Service, are considered "off-budget", while most expenditures and other acceptance categories are considered "on-budget". The total federal deficit is the sum of the on-budget deficits (or surpluses) and the off-budget deficit (or surplus). Since FY1960, the federal government has run on-budget deficits except for FY1999 and FY2000, and total federal deficits except in FY1969 and FY1998-FY2001.
For example, in January 2009 CBO reported that for fiscal year 2008 (FY2008), "on-budget deficit" was $ 638 billion, offset by an "off-budget surplus" (mainly due to Social Security revenues exceeding payments) of $ 183 billion , for a "total deficit" of $ 455 billion. This latter number is commonly reported in the media. However, an additional $ 313 billion is required for "Treasury actions aimed at stabilizing financial markets," an unusually high amount due to the Subprime mortgage crisis. This means that "debt held by the public" increased by $ 768 billion ($ 455B $ 313B = $ 768B). "Off-budget surpluses" were borrowed and spent (as usual), increasing "intra-government debt" by $ 183 billion. Thus, the total increase in "National debt" in FY2008 was $ 768B $ 183B = $ 951 billion. Ministry of Finance reported an increase in National Debt $ 1,017B for FY2008. The $ 66 billion difference is likely due to "supplementary supplementation" for the War on Terror, some of which are beyond the full budget process until President Obama starts including most of them in his FY2010 budget.
In other words, spending a surplus "Social Security" from "off budget" adds to the total national debt (by increasing intragovernmental debt) while the "off-budget" surplus reduces the "total" deficit reported in the media. Certain expenditures called "supplementary supplements" fall outside the full budget process but add to the national debt. Funding for the Iraq and Afghanistan wars is accounted for in this way before the Obama administration. Certain stimulus and warning steps are also outside the budget process. The federal government publishes total debt (public and intragovernmental ownership) every month.
Reductions
Real negative interest rate
Since 2010, the US Treasury has obtained negative real interest rates on government debt, which means the rate of inflation is greater than the interest rate paid on debt. Such low rates, surpassed by the rate of inflation, occur when the market believes that there is no alternative with a low enough risk, or when popular institutional investments such as insurance, pension, or bond, money market and balanced mutual funds are required or to invest a substantial amount in Treasury securities to hedge against risk.
Economist Lawrence Summers stated that with low interest rates, government borrowing really saves taxpayer money and increases creditworthiness.
In the late 1940s and early 1970s, the United States and Britain reduced their debt burden by 30% to 40% of GDP per decade by taking advantage of negative real interest rates, but there was no guarantee that the level of government debt would continue. keep this low. Between 1946 and 1974, the debt-to-GDP ratio fell from 121% to 32% although there was a surplus in just eight years that was much smaller than the deficit.
Upgrade backup and bank reserve requirements
Two economists, Jaromir Benes and Michael Kumhof, work for the International Monetary Fund, publish a working paper called Chicago Revisited Plan which shows that debt can be eliminated by increasing bank reserve requirements and converting from fractional reserves. banking to full backup banks. Economists at the Paris School of Economics have commented on the plan, stating that it has become a status quo for coin currencies, and an economist Norges Bank has reviewed the proposal in the context of considering the financial industry as part of the real economy. A Center for Economic Policy The research paper agrees with the conclusion that, "no real obligation is created by the creation of new fiat money, and therefore public debt does not increase as a result".
Ceiling debt
The debt ceiling is a legislative mechanism to limit the amount of national debt that can be issued by the Ministry of Finance. As a result, he will hold the Treasury Department to pay for expenses once the limit is reached, even if the expenditure has been approved (within budget) and has been adjusted. If this situation occurs, it is unclear whether the Treasury will be able to prioritize debt payments to avoid default on its debt obligations, but should fail on some of its non-debt obligations.
Debt loans
Because a large number of people have records, bills, and bonds in the "public" part of the debt, Treasury also publishes information that classifies the types of holders by the general category to describe who owns the debt of the United States. In this data set, a portion of the public is moved and combined with the total portion of the government, since this amount is owned by the Federal Reserve as part of the US monetary policy. (See Federal Reserve System.)
As can be seen from the graph, slightly less than half of the total national debt owed to "Federal Reserve and intragovernmental ownership". The holders of foreign and international debt are also incorporated from parts of notes, bills, and bonds. On the right is a chart for data as of June 2008:
Foreign ownership
In September 2014, foreigners had $ US6.06 trillion in US debt, or about 47% of publicly held debt of $ 12.8 trillion and 34% of total debt of $ 17.8 trillion. The biggest holders are China, Japan, Belgium, the Caribbean banking center, and oil exporters.
The share held by foreign governments has grown over time, up from 13% of public debt in 1988 to 25% in 2007.
As of September 2014, the largest single holder of US government debt is China, with 21% of all US-owned foreign debt (10% of total US public debt). China's ownership of government debt, as a percentage of all government-held foreign debt, has risen significantly since 2000 (when China holds only 6 percent of all US-owned foreign securities).
Exposure to this potential financial or political risk if foreign banks stop buying Treasury securities or start selling them on a large scale is discussed in a June 2008 report released by the Bank of International Settlements, which states, "Foreign investors in US dollar assets have seen losses large is measured in dollars, and larger ones are measured in their own currency.Although it is impossible, very unlikely for public sector investors, suddenly the exit of the exit can not be ruled out completely. "
On May 20, 2007, Kuwait ceased grouping its currency exclusively into dollars, preferring to use dollars in a currency basket. Syria made a similar announcement on June 4, 2007. In September 2009, China, India and Russia said they were interested in purchasing International Monetary Fund gold to diversify their dollar-denominated securities. However, in July 2010 the Chinese State Administration for Foreign Currency Exchange "ruled out the option to dispose of huge holdings of US Treasury securities" and said gold "can not be the main channel for investing our foreign reserves" because the market for gold is too small and the price is too easy to change.
According to Paul Krugman, "It is true that foreigners now hold major claims in the United States, including a fair amount of government debt, but every dollar of foreign claims in the US is matched against a US covenant worth 89 cents against foreigners and because foreigners tend to place investment they are in the US into a safe asset, with low yields, Americans actually get more of their assets abroad than paid to foreign investors.If your image is a nation that has been very fond of Chinese people, you have been misinformed We are also not leading quickly in that direction. "Nonetheless, the country's net investment position (including debt and debts held by other countries) is owed more than $ 7 trillion and has recently risen very fast.
Forecasting
ten-year prospects of CBO 2018-2028
CBO estimates the impact of Trump's withholding tax cuts and separate spending regulations for the period 2018-2028 in their annual "Budget & amp; Outlook", released in April 2018:
- The budget deficit in fiscal 2018 (which runs from 1 October 2017 to 30 September 2018, the first year budgeted by President Trump) is estimated to be $ 804 billion, an increase of $ 139 billion (21%) from $ 665 billion in 2017 and up $ 242 billion (39%) from the previous preliminary estimate (June 2017) of $ 580 billion for 2018. The June 2017 forecast is essentially a budget line inherited from President Obama; it was prepared before the Tax Law and other spending increase under President Trump.
- For the period 2018-2027, the CBO projects an annual deficit amount (ie, an increase in debt) to $ 11.7 trillion, an increase of $ 1.6 trillion (16%) from the previous preliminary estimate (June 2017) of $ 10, 1 trillion.
- The $ 1.6 trillion debt increase includes three main elements: 1) $ 1.7 trillion less in revenue due to tax cuts; 2) $ 1.0 trillion more in expenditure; and 3) partially offsetting a revenue increase of $ 1.1 trillion due to higher economic growth than previously thought.
- Publicly held debt is expected to increase from 78% of GDP ($ 16 trillion) by the end of 2018 to 96% of GDP ($ 29 trillion) by 2028. It will be the highest level since the end of the Second World War.
- The CBO is estimated under an alternative scenario (where the policy in force in April 2018 is maintained beyond the scheduled initiation or expiration) that the deficit will be much higher, increasing by $ 13.7 trillion over the period 2018-2027, an increase of $ 3 , 6 trillion over the preliminary estimate of June 2017. Maintaining current policies for example will include an extension of an individual Trump tax withheld through an expiration scheduled in 2025, among other changes.
- A debt increase of $ 1.6 trillion represents about $ 12,700 per household (assuming 126.2 million households by 2017), while $ 3.6 trillion represents $ 28,500 per household.
CBO long-term prospects
CBO reports its Outlook Long Term Budget each year, providing at least two scenarios for spending, revenue, deficit, and debt. Outlook 2014 primarily covers a period of 25 years to 2039. The "additional basic scenario" assumes that the laws currently in the book will apply, for the most part. CBO reported in July 2014 that under this scenario:
If current legislation remains generally unchanged in the future, federal debt held by the public will decline somewhat relative to GDP over the next few years. After that, however, rising budget deficits will push debt back to and above current high levels. Twenty-five years from now, by 2039, federal debt held by the public will exceed 100 percent of GDP. In addition, the debt will be on the upward path relative to the size of the economy, a trend that can not be sustained indefinitely. By 2039, the deficit will be equal to 6.5 percent of GDP, greater than in any year between 1947 and 2008, and publicly held federal debt will reach 106 percent of GDP, more than in any year except 1946 - even without factors in the economic effects of rising debt.
The "expanded alternative fiscal scenario" assumes the continuation of the current trend, resulting in a more unfavorable debt position and adverse economic consequences relative to the baseline scenario. CBO reported in July 2014 that under this scenario:
[C] Certain policies that are present but scheduled to change under current legislation are assumed to continue, and some current provisions of the law that may be difficult to maintain for long periods are assumed to be modified. Under that scenario, a deficit that excludes interest payments would be about $ 2 trillion more during the first decade than below the baseline; furthermore, the deficit will be greater than that below the extended base line with a rapidly increasing number, doubling as a percentage of GDP in less than 10 years. CBO projects that real GNP in 2039 will be about 5 percent lower under the alternative fiscal scenario that is expanded rather than below the expanded baseline with economic feedback, and that the interest rate will be about three quarters of a percentage point higher. Reflecting the budgetary effect of such economic developments, federal debt will increase to 183 percent of GDP by 2039.
Over the longer term, cost-cutting CBO projects and mandatory spending categories (eg, Medicare, Medicaid and Social Security) will continue to grow relative to GDP, while discretionary categories (eg, Defense and other Cabinet Ministries) continue to decline relative to GDP. Debt is projected to continue to increase relative to GDP under the two scenarios above, although the CBO also offers another scenario involving austerity measures that will reduce the debt to GDP ratio.
CBO estimates under the baseline scenario that publicly held US debt will increase by approximately $ 8.5 trillion between late 2014 and 2024. Under a deficit-deficit scenario of $ 2 trillion over the first decade, federal debt held by the public in 2039 will persist. by 75 percent of GDP, just slightly above the 72 percent mark by the end of 2013. Based on a $ 4 trillion deficit reduction scenario for the decade, publicly held public debt will fall to 42 percent of GDP by 2039. By comparison, the debt comprised 35 percent of GDP in 2007 and has an average of 39 percent of GDP over the past 40 years.
The CBO reported in September 2011: "Nations can not continue to maintain past expenditure programs and policies with tax revenues that have been spent." Citizens will have to pay more for their government, receive less in government services and benefits, or both.
Risk and debate
CBO risk factors
CBO reported several types of risk factors related to the increasing level of debt in the July 2010 publication:
- A growing share of savings leads to the purchase of government debt, rather than investing in productive capital goods such as factories and computers, leading to lower output and revenue than would otherwise occur;
- If higher marginal tax rates are used to pay increased interest costs, savings will decrease and jobs will be discouraged.
- Increased interest costs will force reductions in government programs;
- Limitations on the ability of policymakers to use fiscal policy to respond to economic challenges; and
- Increased risk of sudden fiscal crisis, where investors demand higher interest rates.
Concerns over US debt holdings in China
Many American and other economic analysts have expressed concern over the "vast" US government property holdings of the People's Republic of China, as part of their reserves.
The National Defense Authorization Act of fiscal 2012 includes a provision requiring the Minister of Defense to undertake a "national security risk assessment of US federal debt held by China." The department issued its report in July 2012, stating that "attempting to use US Treasury securities as a coercive tool will have limited effects and will likely be more detrimental to China than the United States because the threat is not credible and the effect will be limited even if it does not offer a preventive option China, whether in diplomatic, military or economic territory, and this will remain true both in peacetime and in a crisis or war scenario. "
The 112th US Congress introduced a law that aims to assess the implications of US debt holdings by China. The 2013 report claims that "[a] potentially serious short-term problems will arise if China decides to abruptly significantly reduce their US liquid financial assets" [emphasis in the original text], noting, that Federal Reserve System Chairman Ben Bernanke, in 2007, stated that "since foreign ownership of US Treasury securities represents only a fraction of the total outstanding US credit market debt, the US credit market should be able to absorb without major difficulties shifting foreign allocations."
A large number of economists and analysts ignore any and all concerns over US government foreign debt holdings in US dollars, including Chinese holdings.
Sustainability
According to the Government Accountability Office (GAO), the United States is on an "unsustainable fiscal path" due to projected future increases in Medicare and Social Security spending.
Risk for economic growth
The level of debt can affect the rate of economic growth. In 2010, economists Kenneth Rogoff and Carmen Reinhart reported that among the 20 developed countries studied, average annual GDP growth was 3-4% when debt was relatively moderate or low (ie below 60% of GDP), but dips only 1.6% when debt is high (ie, above 90% of GDP). In April 2013, Rogoff and Reinhart's research conclusions were questioned when coding errors in their original papers were discovered by Herndon, Ash and Pollin of the University of Massachusetts, Amherst. Herndon, Ash and Pollin found that after correcting the errors and orthodox methods used, there was no evidence that debt above a certain threshold reduced growth. Reinhart and Rogoff maintain that after correcting the error, the negative relationship between high debt and growth remains. However, other economists, including Paul Krugman, argue that growth is low which causes the national debt to rise, not vice versa.
Commenting on fiscal sustainability, former Federal Reserve Chairman Ben Bernanke stated in April 2010 that "Both experience and economic theory clearly point to a threshold where government debt begins to end prosperity and economic stability, but given the significant costs and risks associated with the rapid rise in federal debt, our nation should immediately put a credible plan to reduce the deficit to a sustainable level over time. "
Interest and debt service charges
Although debt levels are rising, interest costs remain at the level of about 2008 (about $ 450 billion total) because it is lower than the long-term interest rates paid on government debt in recent years. However, interest rates may return to higher historical levels.
The cost to pay off US national debt can be measured in various ways. CBO analyzes the net interest as a percentage of GDP, with a higher percentage indicating higher interest payment expense. During 2015, this is a 1.3% GDP, close to a record low of 1.2% from the 1966-1968 era. The average from 1966 to 2015 is 2.0% of GDP. However, the CBO estimates by 2016 that the number of interest and% of GDP will increase significantly over the next decade as interest rates and debt levels increase: "The interest payments on these debts are a huge burden and are growing rapidly from the federal government.The CBO's baseline shows payments net interest more than tripled under current legislation, up from $ 231 billion in 2014, or 1.3 percent of GDP, to $ 799 billion in 2024, or 3.0 percent of GDP - the highest ratio since 1996. "
Definition of public debt
Economists also debated the definition of public debt. Krugman argued in May 2010 that the debt held by the public is the right measure to use, while Reinhart has testified to the President's Fiscal Reform Commission that gross debt is the right measure. The Center on Budget and Policy Priorities (CBPP) cites research by several economists who support the use of lower debt held by public figures as a more accurate measure of debt burden, disagreeing with members of this Commission.
There is a debate about the economic nature of intragovernmental debt, which is approximately $ 4.6 trillion in February 2011. For example, CBPP argues: that "large increases in [publicly held debt] can also drive interest rate increases and increase the amount of payments the future interest of the federal government must make a lender outside the United States, which reduces the American income.Instead, intragovernmental debt (another component of gross debt) has no such effect because only the federal government owes (and pays interest) on itself. "
However, if the US government continues to run the "budget" deficit as projected by CBO and OMB for the foreseeable future, it must issue marketable Treasury bonds and bonds (ie, publicly held debt) to pay for the projected shortcomings in the Social Security program. This will result in "debt held by the public" replacing "intragovernmental debt".
Intergenerational equity
A debate about national debt is tied to intergenerational justice. For example, if one generation benefits from a government program or job made possible by spending deficit and debt accumulation, to what extent does higher debt pose risks and costs to future generations? There are several factors to consider:
- For every dollar of debt held by the public, there is a government obligation (generally Treasury securities) that is calculated as an asset by the investor. Future generations will be useful if these assets are passed on to them.
- In 2010, approximately 72% of financial assets held by the 5% richest population. It presents the question of wealth and income distribution, as only a small percentage of the people in future generations will receive the principal or interest from investments related to the debt that occurs today.
- As long as US debt is payable to foreign investors (about half of "publicly held debt" during 2012), principal and interest are not directly accepted by US heirs.
- Higher debt levels imply higher interest payments, which create costs for future taxpayers (eg higher taxes, lower government benefits, higher inflation, or increased risk of fiscal crises).
- As long as loan funds are invested today to improve long-term economic productivity and their employees, such as through useful infrastructure or educational projects, future generations can benefit.
- For every dollar of intragovernmental debt, there is an obligation to a particular program beneficiary, generally marketable securities such as those deposited in the Social Security Trust Fund. Adjustments that reduce future deficits in the program can also impose costs for future generations, through higher taxes or lower program spending.
Krugman wrote in March 2013 that by ignoring public investment and failing to create jobs, we are doing more harm to future generations than simply channeling debt: "Fiscal policy is, indeed, a moral issue, and we should be ashamed of what we are doing for the next generation's economic prospects.But our sin involves too little investment, not borrowing too much. "Youth workers face high unemployment rates and research has shown that their earnings may be lagging throughout their careers as a result. Teacher work has been cut, which may affect the quality of education and competitiveness of younger Americans.
Credit default
The US has never completely failed.
However, in April 1979, the United States may technically fail to pay $ 122 million in Treasury bills, which is less than 1% of US debt. The Treasury Department characterized it as a delay rather than as a default, but it did have consequences for short-term interest rates, which jumped 0.6%. Others see it as temporary, some defaults.
Appendix
National debt for certain years
On June 25, 2014, BEA announced: "[On 30 July 2014 i] in addition to regular revised forecasts for the last 3 years and for the first quarter of 2014, GDP and select components will be revised back to the first quarter of 1999.
Fiscal year 1940-2009 The GDP figures are from February 2011 Office of Management and Budget figures containing revisions of previous year figures due to significant changes from previous GDP measurements. Fiscal year 1950-2010 Measurement of GDP originated from December 2010, the report of the Bureau of Economic Analysis which also tends to be the subject of revision, especially in recent years. After that the OMB figure was revised back to 2004 and BEA numbers (in revision dated 31 July 2013) were revised back to 1947.
Regarding the estimates recorded in the GDP column (last column) marked with the symbol "~", the absolute difference from the previous (one month after) BEA report from the percentage of GDP changed to current findings (as of November 2013) found in revised revisions of 1.3% Ã, Â ± 2.0% or 95% probability is in the range of 0.0-3.3%, assuming the difference occurs according to the standard deviation of the mean absolute difference of 1.3%. For example. with progress reports of a $ 400 billion increase of GDP of $ 10 trillion, for example, one can be 95% confident that the range in which the exact amount of GDP dollars lies will be 0.0-3.3% different from 4.0% (400 ÃÆ'Â · 10,000) or in the range of $ 0 to $ 330 billion different from the hypothetical $ 400 billion ($ 70-730 billion range). Two months later, with a revised value, the potential difference range of the stated estimate shrank, and three months later with another revised value, the range shrank again.
The fiscal year 1940-1970 from July 1 of the previous year (for example, the 1940 Budget Year commencing July 1, 1939 and ending June 30, 1940); fiscal year 1980-2010 from 1 October of the previous year. Intraday government debt before the Social Security Act is considered equal to zero.
1909-1930 estimated calendar year GDP comes from MeasuringWorth.com Estimates of Fiscal Year come from simple linear interpolation.
(a1) The audited figures are "about $ 5.659 billion."
(a2) The audited figures are "about $ 5,792 billion."
(a3) ​​â € <â €
(a) The audited number is said to be "about" the stated number.
(a4) The audited figure is "about $ 7.918 billion."
(a5) The audited figures are "about $ 8.493 billion."
(a6) The audited figure is "about $ 8.993 billion."
(a7) The audited figures are "about $ 10.011 billion."
(a8) The audited figure is "about $ 11.898 billion."
(a9) The audited figures are "about $ 13.551 billion."
(a10) The GAO confirms the Bureau of public debt figure as $ 14,781 billion.
(a11) GAO confirms the Bureau of public debt figure as $ 16.059 billion.
(A12) The GAO confirms the Bureau of Fiscal Service figure of $ 16.732 billion.
(A13) The GAO confirms the Bureau of Fiscal Service figure of $ 17.810 billion.
(a14) The GAO confirms the Bureau of Fiscal Service figure of $ 18.138 billion.
Interest payment
Holder of foreign US Treasury securities
The following is a list of the top foreign holder (more than $ 150 billion) of US Treasury securities as listed by the US Treasury Department (revised by March 2018 survey):
Statistics
- US. official gold reserves as of July 31, 2014 totaling 261.5 million troy ounces with book value of approximately $ 11.04 billion.
- Foreign exchange reserves of $ 140 billion as of September 2014.
- National debt is equivalent to $ 59,143 per US resident, or $ 159,759 per Taxpayer member working in the US, as of March 2016.
- In 2008, $ 242 billion was spent on interest payments serving debt, of total tax revenues of $ 2.5 trillion, or 9.6%. Including non-cash interest earned primarily for Social Security, interest is $ 454 billion or 18% of tax revenue.
- The amount of US household debt, including mortgage loans and consumer debt, was $ 11.4 trillion in 2005. For comparison, total US household assets, including real estate, equipment, and financial instruments such as mutual funds, are $ 62.5 trillion in 2005.
- The total credit for US Consumer Credit Card scrolling was $ 931.0 billion in April 2009.
- The balance of the US trade deficit in goods and services was $ 725.8 billion in 2005.
- According to the 2002 US Treasury Department's Annual Report on Foreign Ownership of US Securities, the United States values ​​the overseas treasury securities portfolio of $ 2.7 trillion. The largest debtors are Canada, the United Kingdom, Cayman Islands and Australia, which are responsible for the 1.2 trillion of state debt paid to the US population.
- All public debt in 1998 was due to the cost of research, development and deployment of US nuclear weapons and nuclear weapons-related programs during the Cold War.
A 1998 Brookings Institution study published by the Nuclear Weapons Cost Study Committee (formed in 1993 by W. Alton Jones Foundation), calculates that total US nuclear weapons expenditures from 1940 to 1998 were $ 5.5 trillion in 1996 Dollars. Total public debt at the end of fiscal year 1998 was $ 5,478,189,000,000 in 1998 Dollar or $ 5.3 trillion in Dollar 1996.
International debt comparison
Source: Eurostat, International Monetary Fund, World Economic Outlook (emerging market economy); Organization for Economic Cooperation and Development, Economic Outlook (advanced economy) IMF,
1 China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, and Thailand 2 Afghanistan , Armenia, Australia, Azerbaijan, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, People's Republic, Fiji, Georgia, Hong Kong SAR, India, Indonesia, Japan, Kazakhstan, Kiribati, Korea, Republic, Kyrgyz Republic, Lao PDR, Macao SAR, Malaysia, Maldives, Marshall Islands, Micronesia, Fed. United States, Mongolia, Myanmar, Nauru, Nepal, New Zealand, Pakistan, Palau, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Islands, Sri Lanka, Taiwan Province China, Tajikistan, Thailand, East Timor, Tonga, Turkey, Turkmenistan, Tuvalu, Uzbekistan, Vanuatu, Vietnam
Recent additions to US public debt
On July 29, 2016, BEA released a revision for GDP figures for 2013-2016. The figures for this table are corrected next week with the change in figures in those fiscal years.
On July 30, 2015, BEA released a revision for 2012-2015 GDP figures. The figures for this table are corrected on that day with changes in FY 2013 and 2014, but not 2015 because FY 2015 is updated in a week with the release of total debt for July 31, 2015.
On June 25, 2014, the BEA announced a revised 15-year GDP figure to take place on July 31, 2014. The figures for this table are corrected after that date with changes in FY 2000, 2003, 2008, 2012, 2013 and 2014. Figures the more appropriate TA 1999-2014 debt comes from the Treasury audit. Variations in the 1990s and FY 2015 figures because the GDP figures were either double-sourced or the initial relative respectively. The revised revision of the overall revision dated July 31, 2013 is described on the website of the Bureau of Economic Analysis. In November 2013, the total debt and annual debt as a percentage of the GDP column in this table was changed to reflect the revised GDP figures.
The ceiling rate of historical debt
See also
- The 2008 Emergency Economic Stabilization Act
- List of countries by public debt
- Default default
- The Troubled Asset Help Program
References
Further reading
External links
- Debt to Penny and Who Holds it Public and Intrinsic
- Foreign Ownership of the Federal Debt Congressional Research Service
- Historical Table, Office of Management and Budget
- US. Treasury Resource Center - Treasury International Capital System (TIC)
- Real time debt hours
Source of the article : Wikipedia
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