The U.S. Government Will Borrow Close To 4 Trillion Dollars This Year
By Michael Snyder
July 18th, 2013
When you add maturing debt to the new debt that the federal government is accumulating, the total is quite eye catching. You see, the truth is that the U.S. government must not only borrow enough money to fund government spending for this year, it must also “roll over” existing debt that has reached maturity. Of course the government never actually pays any of that debt off. Instead, it essentially takes out new debts to cover the old ones. So the U.S. government is actually borrowing far more money each year than most Americans realize. For fiscal year 2013, the U.S. budget deficit will be about $845 billion, but on top of that the government will also have to borrow about 3 trillion dollars to pay off old debt that is maturing. Overall, the U.S. government will borrow close to 4 trillion dollars this year, and that number will likely be even higher next year. That is not going to cause a crisis as long as interest rates stay super low, but if interest rates begin to rise substantially, the game will change dramatically.
When the government borrows money, it has to pay it back someday. Back in the old days, the federal government used to issue lots of debt that would not mature for a very long time. But in recent years things have been very different…