Treasury Bonds and the National Debt

Thanks for sharing this!

Four years ago, the US Treasury stopped issuing 30 year bonds. In February 2006 they’ll be back. Why? A possible reason: At the time long-term bond issues were discontinued, the debt and deficit were thought to be in check. But that has changed.

As of September 28, 2005 the current debt figure was nearly eight trillion dollars. The specific amount, according to the Treasury Department’s web site: $7,921,799,829,672.03. The estimated deficit for the year is expected to be approximately $333 billion.

What’s the difference between deficit and debt?

In national terms, a deficit is the difference between what the government takes in from taxes and other revenues and the amount of money the government spends in a certain period of time. Items comprising the deficit are either on-budget, which require borrowing through Treasury securities like bills or notes, or off-budget (such as Social Security).

The total debt is accumulated deficits plus accumulated off-budget amounts.

To put it on a personal level, if your expenses exceed your salary for the same period, you’re operating at a deficit (some people call this “too much month left at the end of the money”). If you borrow money to make up that difference, say by using credit cards, you’re running up debt.

Whether personal or national, excess spending requires additional money. Though the Treasury indicates there are other reasons for re-introducing 30 year bonds, in the end they’re simply a way to finance today’s expenses with tomorrow’s promises.

You might also like these posts

Article – Preparing for Hurricane Season Image source: By Nilfanion , via Wikimedia Commons. The map shows the tracks of all tropical cyclones which formed worldwide from 1985 to 2005.The Atlantic hurricane season begins June 1. While the 2014 season is expected to be a mild one, mild doesn’t mean storm-free. Getting ready early is a good idea—and early preparati...
Article — Locked Out Image source: UK, public domain, via Wikimedia Commons What’s on your computer? Your manuscripts? Work? Photos? What would you do if you were denied access to those files—if you were locked out by rogue hackers? If you’re shaking your head because you think nothing on your computer is of value to hackers, consider th...
Article — Tax Identity Theft Awareness Week Image source: Taxes are scary enough, without adding tax identity theft to the mix. The costs—$3.6 billion a year according to an estimate by the US Treasury Inspector General for Tax Administration—are scary, too. Unfortunately, both tax ID theft and the costs are on the rise. The US Federal Trade Commission...
Article — Your 2013 Federal Income Tax Return Image source: Whether you’re a part- or full-time freelancer, receiving income means filing a tax return. Here are three things to keep in mind as you look back at your 2013 business activity. Dates: The IRS will begin accepting 2013 business returns on Monday, January 13, 2014. For individual returns, the da...

We write. Visit us in Carpenter Country, a magical place that, like our stories, is unreal but not untrue.

Posted in Articles Tagged with: ,