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.