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$10 Trillion Withdrawn From U.S. Treasury This Fiscal Year Alone?

Friday, September 7, 2012

timothy geithner

According to the Daily Treasury Statement–the official daily accounting sheet for the federal government—withdrawals from the Treasury exceeded $10 trillion this year on Aug. 30, when they rose from $9.903 trillion to $10.035 trillion.

How can this be?

The answer: The federal government needs to churn through trillions of dollars each year above the level of current annual federal spending in order to maintain its $16 trillion debt—much of which is held in Treasury notes that mature in anywhere from 2 to 10 years and Treasury bills that mature in anywhere from a few days to less than a year.

The federal government has an interest—literally—in maintaining much of the debt in these short- and mid-term securities because it pays a lower interest rate on them than it does on Treasury bonds, which mature in 30 years.

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