U.S. Government Borrowing

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In recent years Congress has authorized huge amounts of borrowing.

Though what mechanism has the government borrowed? Has it issued U.S. Treasury Bills, Notes, and Bonds? The expansion of U.S. currency? The purchase of U.S. debt by each of the 12 Federal Reserve Banks or the Federal Reserve Bank of New York? What types of private parties are buying the debt? Foreign countries? Is it becoming more difficult to sell the debt? Are the votes to offer it for sale unanimous?

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gollum wrote:

Has it issued U.S. Treasury Bills, Notes, and Bonds?

Yes.

gollum wrote:

The expansion of U.S. currency?

Such a thing would not count as borrowing.

This has so far not been used to help the government meet its spending obligations. It remains an option however.

gollum wrote:

The purchase of U.S. debt by each of the 12 Federal Reserve Banks or the Federal Reserve Bank of New York? What types of private parties are buying the debt? Foreign countries?

Anyone who wants to can purchase US government debt.

gollum wrote:

Is it becoming more difficult to sell the debt?

No. Easier. People all over the world continue to want to buy US debt.

gollum wrote:

Are the votes to offer it for sale unanimous?

I'm not sure which votes you are referring to.

1 Reply

@oralloy,

oralloy-

Thank you.

As you state, expansion of the currency does not count as borrowing. Also, it is a more attractive option for the government because currency does not pay interest. That said, dollar-for-dollar, it helps to satisfy the government's huge spending and lesser tax receipts.

As you say, people worldwide continue to want to buy US debt.

So, of the U.S. debt being issued, how much is purchased by Federal Reserve Banks; how much by U.S. government agencies, as compared to how much by private parties?

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@gollum,

gollum wrote:

As you state, expansion of the currency does not count as borrowing. Also, it is a more attractive option for the government because currency does not pay interest. That said, dollar-for-dollar, it helps to satisfy the government's huge spending and lesser tax receipts.

Note that if the US expanded the currency too much, that would drive inflation, which the Federal Reserve would counter by raising interest rates to limit borrowing.

The result would be more federal spending and less non-federal spending. Good for the feds. Bad for everyone else.

gollum wrote:

So, of the U.S. debt being issued, how much is purchased by Federal Reserve Banks; how much by U.S. government agencies, as compared to how much by private parties?

I have no idea.

Foreign governments buy US debt too. But I don't know the numbers for them either.

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U.S. Government Borrowing

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