Note on U.S. Government Debt
Concern has been expressed within the United States and world-wide at the size of the U.S. government debt which currently stands at $34.14 trillion, $26.5 trillion of which is held by the public and $12.1 trillion is intragovernmental debt. This sum represents the total amount of outstanding borrowing by the U.S. Federal Government accumulated since the U.S. was constituted.
According to the Treasury Department, net interest costs on this debt were $659 billion in the fiscal year 2023, which ended on September 30. That is up $184 billion, or 39 per cent, from the previous year and nearly double what it was in the fiscal year 2020. This rise in interest payments means the U.S. government's debt-to-GDP ratio stands at 129 per cent. This stems from both the increase in debt the U.S. is incurring to finance its war expenditures, other pay-the-rich schemes including the debt payments themselves and the Federal Reserve's repeated rate hikes. It gives an idea of the profits the private banks and war producers are making off the backs of the people in the U.S. and the fragility of the U.S. economy.
To avert a default on debt payments, the U.S. Congress raised its debt ceiling at least 90 times in the 20th century. It has never been reduced. It has raised the borrowing cap 60 times since 1978 alone. It also resorts to what are called "extraordinary measures." This refers to "accounting tricks" the Treasury Department can deploy to prevent the government from defaulting on its debt, including moving money from one agency to another when payments come due and suspending some new investments. The debt includes money owed to Social Security, military retirement funds, Medicare and other retirement funds. Thus, in 2023 Treasury Secretary Janet Yellen suspended new investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund claiming this would prevent the government from adding to its debt. Such measures are limited and the pressure to come up with more and more of them has in recent years meant radically reducing social programs, such as programs which provide food stamps and medical aid, as well as clawing back on COVID-19 payments.
The Congressional Budget Office informs that:
"Social Security benefits are disbursed four times a month, on the third day of the month and on three Wednesdays each month (roughly $25 billion per week, totalling about $100 billion each month).
"Payments to Medicare Advantage health care plans and Medicare Part D prescription drug plans (about $40 billion in total) are made on the first day of the month.
"A large share of the pay or benefits for active-duty members of the military, civil service and military retirees, veterans, and recipients of Supplementary Security Income (about $25 billion) is disbursed on the first day of the month.
"Interest payments (amounts vary) are made around the 15th and on the last day of each month."
This article was published in
Volume 54 Number 13 - February 23, 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/MS54136.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca