US Deficit?

Question

I hate to ask, but who does the government borrow money from?
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 04 Mar 2007 at 04:16:19 AM GMT is:

The estimated population of the United States is 301,098,310
so each citizen's share of this debt is $29,202.57.

The National Debt has continued to increase an average of
$1.84 billion per day since September 29, 2006!

What is the role of the Federal Reserve in the deficit?

Answer 1

The national debt occurs when the government spends more on programs than they take in from taxes. This results in a budgetary deficit for a given fiscal year. The sum total of all surpluses minus all deficits = the current national debt. How does the government pay for the extra spending that isn't taken from us in taxes? Well, they sell government bonds that can be bought by you, me, foreign countries, etc. They can also borrow from foreign governments. The bottom line is that they have to get the money from somewhere if it doesn't come from taxes.

Answer 2

The gov't takes on its debt by selling US Treasury bonds to the public -- anyone who wants to buy one is free to do so; and then there is also a thriving aftermarket where people then sell the bonds to one another. That is the bond market.

You can go buy a treasury bond or US Savings bond right now by going to www.treasurydirect.gov , then you'll be the person the government borrows money from. Or you can invest in a bond mutual fund, or open an account with a broker and buy treasury bonds on the bond market, to become a creditor of the US government.

Oh yeah, about 40% of that national debt you cite is actually the Social Security Trust Fund, and the largest portion of new debt taken this year will be the Social Security surpluses being saved. That is a case where the government just sells a bond to itself, and the public does not own it, and it counts as both debt and asset for the government. Weird, huh.

Answer 3

I dont owe them jack! I've paid my taxes this year! lol