What portion of our annual deficit is financed by bonds? Compared to say, treasury notes (such as checks and printed currency), or private lending?
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1$\begingroup$ I'm not exactly sure what you mean by this question. Treasury notes are a type of government bond. Printed money doesn't actually help finance government spending, since all federal reserve notes are backed by assets (usually US government bonds) held by the Fed. Finally, what do you mean "private lending" in this context? "Private lending" (from non-governmental organizations or individuals) finance deficits by buying government bonds. $\endgroup$– AndrewCJun 13, 2018 at 22:55
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$\begingroup$ @AndrewC Some people would say that a Treasury bond was over 10 years in original maturity, a Treasury note 1-10 years and a Treasury bill 1 year or less. But you are right that (apart from time) they are very similar $\endgroup$– HenryJun 14, 2018 at 0:46
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$\begingroup$ Ah, alright, that makes more sense. So to clarify, you're wondering what percentage of our debt is financed by short term bonds vs medium term bonds vs long term bonds (or similar- debt financed over different time horizons)? Final question on that point- just to further clarify, what do you mean by "private lending" exactly? Thanks! $\endgroup$– AndrewCJun 14, 2018 at 1:10
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$\begingroup$ The wording in this question has problems. A “Treasury Note” (note capitals) is a debt instrument issued by the Treasury with a maturity from 2- to 10-years, and most people call them “bonds”, although Treasury Bonds have an initial maturity greater than 10 years. Currency are Federal Reserve Notes (although I believe historically the Treasury issued some?). The other problem is that it compares a deficit (a flow) to stock variables, and it will be very difficult to align the changes to the stocks of liabilities (money/debt) to the deficit in any given period exactly. $\endgroup$– Brian RomanchukJun 14, 2018 at 10:50
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$\begingroup$ @KevinBattleson I would appreciate you mentioning which country you're referring to. $\endgroup$– ahornJun 23, 2018 at 18:34
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1 Answer
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Unfortunately, there doesn't appear to be a single site that clearly identifies the data you seek. However, that information does appear in a couple of different sources, (in a couple of different formats):
This source from the Treasury gives a list of the values of all different types of securities auctioned off at every recent treasury auction in Excel spreadsheets
This source gives the relative holdings for domestic and foreign agents, however it doesn't break down the data into as clear specifics for tyeps of debt held.
Finally, these presentations give overviews (in the "Financing" section of each presentation) of the total value of each type of bond that was issued, and the corresponding value of each typoe that matured.
Hope that helps a bit!
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$\begingroup$ I'm not sure how I can clarify any further. Its not as if when the government runs a deficit that it must finance all of its debt through bonds, otherwise the national debt would never increase. To clarify my understanding, the national debt isn't how many bonds we've issued to private lenders, its how much currency is in circulation. Saying that we finance all of our annual national deficit through treasury bonds is absurd, that would mean we'd have 20 trillion dollars in privately held bonds. At least some of it must simply be added to our national debt and cause inflation. $\endgroup$ Jun 17, 2018 at 3:25
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$\begingroup$ @KevinBattleson I think your understanding of the national debt is a bit off then. The "amount of money in circulation" is the money supply, the national debt is the face value of all outstanding securities the US government has sold. And regardless of how absurd it may sound, that's exactly what it means- the total face value of all outstanding bonds sold by the US is roughly $20 trillion. $\endgroup$– AndrewCJun 17, 2018 at 14:39
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$\begingroup$ wow! okay, well that's... terrifying. So basically whoever holds those bonds owns our country, then? What happens if the US issues bonds and no one buys them? So how does the government expand the money supply? If they don't print currency or issue treasury notes, do they issue loans? If they issue loans, are the loans backed by anything? $\endgroup$ Jun 21, 2018 at 4:43