Congressional budget office website11/9/2023 ![]() When the government issues debt to acquire those assets-for example, to finance student loans-its overall financial condition remains roughly unchanged, as does the amount of debt held by the public net of financial assets. Government spending includes not only payments for services or physical assets, such as real estate or military resources, but also spending that results in the acquisition of financial assets. Debt Held by the Public Net of Financial Assets In addition to discussing debt held by the public, this report examines debt held by the public net of financial assets, gross debt, and debt subject to limit by statute. Several other measures provide information about the nation’s debt, although each has limitations. It is the measure of debt most often used by CBO in its reports on the budget. All else being equal, an increase in government borrowing reduces the amount of money available to other borrowers, putting upward pressure on interest rates and reducing private investment. At the end of 2019, federal debt held by the public was $16.8 trillion, equal to about 79 percent of GDP, a higher percentage than at any other time since just after World War II.ĭebt held by the public is a measure that indicates the extent to which federal borrowing affects the availability of private funds for other borrowers. The annual growth in federal borrowing is driven primarily by budget deficits. Domestic investors currently own about three-fifths of outstanding debt held by the public. ![]() buyers (such as the Federal Reserve System, mutual funds, financial institutions, and individual people), to private investors overseas, and to the central banks of other countries. The Treasury sells securities in the capital markets-often through a primary dealer intermediary-to various U.S. Marketable securities make up the lion’s share of that debt, and nontradable securities, such as savings bonds, make up the rest. To finance the government’s activities, the Treasury issues securities-collectively labeled debt held by the public-that differ in time to maturity, the ways they are sold to investors, and the structure of their interest payments. This Congressional Budget Office report explains how federal borrowing is structured and measured, who owns it, how it has evolved over time, how much it is projected to grow, and what its budgetary and economic consequences are. Although large by historical standards, the current debt-to-GDP ratio is similar to that of many other developed nations.
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