Treasury Forced to Issue $1T in New Debt in First 6 Weeks of FY14

[CaseyJones]

http://cnsnews.com/news/article/tere...t-6-weeks-fy14

Between Oct. 1, 2013, the first day of fiscal 2014, and Nov. 14—which was less than a month after Congress agreed to temporarily suspend the legal limit on the federal debt—the Treasury was forced to issue more than $1 trillion in new debt.

During that time, according to the Daily Treasury Statement, the Treasury issued $1,014,215,000,000 in new bills, notes, bonds and other securities.

The government needed this $1,014,215,000,000 to cover government obligations and expenses that exceeded the $255,080,000,000 it raked in through tax revenues during the same six-week period.

Where did that combined $1,014,215,000,000 in newly borrowed money and $255,080,000,000 in new tax revenues go?

The lion’s share went to payoff maturing securities the Treasury had sold before and had now come due.

In total, according to the Daily Treasury Statement, the Treasury needed to redeem $879,734,000,000 in maturing debt during the first six weeks of the fiscal 2014.

[gwax23]

This is totally sustainable....

[Seraphim]

"The lion’s share went to payoff maturing securities the Treasury had sold before and had now come due."

The US debt problem is going to get a whole lot worse and in SHORT ORDER.

Over the last 5 years, most of the issued debt (the same debt that has parabolically expanded the countries debt) has been SHORT dated bonds.

Most of these are now coming due. They are being rolled over, by taking on MORE debt.

The original debt produced virtually nothing to garner a return to pay the debt off. This will get bad over the nest 2 years.

[gwax23]

"The lion’s share went to payoff maturing securities the Treasury had sold before and had now come due."

The US debt problem is going to get a whole lot worse and in SHORT ORDER.

Over the last 5 years, most of the issued debt (the same debt that has parabolically expanded the countries debt) has been SHORT dated bonds.

Most of these are now coming due. They are being rolled over, by taking on MORE debt.

The original debt produced virtually nothing to garner a return to pay the debt off. This will get bad over the nest 2 years.

"No it wont. Everythings fine. The dollar is stable and will remain stable for generations to come. The debt insnt a problem. Inflation? Hah inflationshmation." - Some people on RP forums (Exaggerated for humor)

[Zippyjuan]

Paying off maturing debt is not the same as issuing new debt.

The lion’s share went to payoff maturing securities the Treasury had sold before and had now come due.

Rolling over does not increase the total debt (though the interest they had to pay on it does).

If I owe $50 to Tom and borrow $50 from Ken to pay off Tom I still owe $50- not $100.(in the case of Treasury notes, I may be borrowing again from Tom to pay off Tom if he buys a new security to replace the one which matured).

[Origanalist]

Paying off maturing debt is not the same as issuing new debt.



Rolling over does not increase the total debt (though the interest they had to pay on it does).

If I owe $50 to Tom and borrow $50 from Ken to pay off Tom I still owe $50- not $100.

Oh. All is well then, carry on.

[Seraphim]

Zippy, dude, come one.

It clearly states MORE debt was incurred to pay off old debts.

The government needed this $1,014,215,000,000 to cover government obligations and expenses that exceeded the $255,080,000,000 it raked in through tax revenues during the same six-week period.

Paying off maturing debt is not the same as issuing new debt.



Rolling over does not increase the total debt (though the interest they had to pay on it does).

If I owe $50 to Tom and borrow $50 from Ken to pay off Tom I still owe $50- not $100.

[Zippyjuan]

Paying off old debt is retiring debt. That debt goes away. In my example, my debt to Tom went away though I borrowed from Ken. The net effect is that aside from the interest payments, my debt did not change.

It clearly states MORE debt was incurred to pay off old debts.

Not accurate. It says that the Treasury incurred more debt. It says most of the new debt was to replace old debt. It doesn't say that more debt went only to paying off old debts. More borrowing also did have to go to new debt- the budget shortfalls which occured during that time.

During that time, according to the Daily Treasury Statement, the Treasury issued $1,014,215,000,000 in new bills, notes, bonds and other securities.

Most of the new notes went to replace old notes. Some went to interest, some went to new debt.

In total, according to the Daily Treasury Statement, the Treasury needed to redeem $879,734,000,000 in maturing debt during the first six weeks of the fiscal 2014.

According to those figures, real new debt was $134.481 billion- the difference between the total issued minus the total spent on replacing old debt.

$880 billion in old debt went away and that was replaced by $1,014 billion in new debt- an increase of $134 billion.

Same effect as if you refinanced your mortgage or a student loan or car loan. You took on the debt of the new loan but got rid of the amount of the old one.

[Seraphim]

Zippy.

Come. On.

If I pay off an old debt with a new debt...the old debt is retirred...but I still OWE.

If you pay your Visa off with your Mastercard....YOU'RE STILL IN DEBT. And you're paying debt with debt!

That was my whole point. The US is paying off old debt with new debt. The debt is still mounting and the debt explosion from 2008 has been nearly all SHORT dated bonds that require to be rolled over. Rolled over - paying off old debts by incurring new ones.

The next few years sees the US having trillions and trillions of debt being due. It can only be paid by taking on new debt.

Will the new debt have less, the same or more interest?

The latter of the three is crippling to the US.

Paying off old debt is retiring debt. That debt goes away. In my example, my debt to Tom went away though I borrowed from Ken. The net effect is that aside from the interest payments, my debt did not change.



Not accurate. It says that the Treasury incurred more debt. It says most of the new debt was to replace old debt. It doesn't say that more debt went only to paying off old debts. More borrowing also did have to go to new debt- the budget shortfalls which occured during that time.



Most of the new notes went to replace old notes. Some went to interest, some went to new debt.



According to those figures, real new debt was $134.481 billion- the difference between the total issued minus the total spent on replacing old debt.

[Seraphim]

Zippy, your own quote...the one you used to refute that more debt was not incurred to replace old debts.


"According to those figures, real new debt was $134.481 billion- the difference between the total issued minus the total spent on replacing old debt."

[Zippyjuan]

Zippy, your own quote...the one you used to refute that more debt was not incurred to replace old debts.


"According to those figures, real new debt was $134.481 billion- the difference between the total issued minus the total spent on replacing old debt."

As I said, total debt issued includes the retired debt plus interest and new debts- budget shortfalls. It isn't just the replacement of old debt.

Come. On.

If I pay off an old debt with a new debt...the old debt is retirred...but I still OWE.

If you pay your Visa off with your Mastercard....YOU'RE STILL IN DEBT. And you're paying debt with debt!

Exactly. You do still owe. But you don't owe more. You just change the paperwork and possibly who you send the money to.

If my mortgage was $100k and I refinance it, that $100k debt gets retired with the money borrowed and I do still owe $100k to pay off the new loan. Total debt is still the same (there will be transaction costs). The $100k isn't really new debt. I don't owe any more money becasue I refinanced (again, aside from transaction costs). Now if I borrow money to buy a car as well, my total debt does increase and so the total national debt increased due to more spending and additional borrowing. That additional borrowing in the time period stated above was $134 billion. That is how much what the government (taxpayers) owes increased by- the real increase in debt.

Debt rollover is the government refinancing.

Will the new debt have less, the same or more interest?

Depends on what rate you had before and what rate you get but yes, probably higher- which is why I thought they should have been issuing more long-term debt to lock in those low rates for as long as possible.

[Bryan]

From the info I see, Zippy is right on the $134 billion. However, it would seem out debt obligation would have gone up too. If you owe Tom $50, it might be because you borrowed $45, and in getting the $50 from Ken you might agree to pay $55 later. So our debt obligation went up by kicking the can...

[tod evans]

Thank goodness government wasn't forced to shut down again...