![]() However, since interest on the debt must be paid back to creditors who buy government securities, the government must spend a growing amount of its budget to repay the national debt. This debt can be held by individuals and companies, known as public debt, or debt held by the government itself, known as intragovernmental debt. These securities, which include Treasury bills, notes, bonds, and more, are then paid back by the federal government to investors at a fixed rate. The United States pays for its budget deficit by selling government securities, which are bonds the Treasury Department issues for short-term revenue. On that same day, Treasury Secretary Janet Yellen informed Congress that the government could run out of cash as early of June 1 if the debt ceiling is not raised or suspended in time. Without borrowing money, however, the government could not fund basic programs and public services critical to Americans’ health, welfare, and security.Īs of May 1, 2023, the national debt stands at $31.46 trillion. The US has run a budget deficit over the last 20 years, substantially growing the national debt. This bill, compounded by interest owed to these investors, results in the national debt.įor every year the federal government runs a deficit, the national debt grows as a result of the increasing amount of money borrowed. ![]() These deficits add up over time, creating a bill the US covers by borrowing money from investors. For every year the US spends more money than it earns, the result is a budget deficit. The national debt is the total amount of outstanding borrowed money the federal government has accumulated over time. ![]()
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