Government bonds are part of the national debt, as are loans from banks, and Treasury securities. The debt also includes unfunded liabilities like pension plan payments and, by some measures, Social Security. Bonds sold for infrastructure projects are also part of the national debt. Some economists, but not all, include sums related to bills the government must pay for goods and services it has contracted for in the current fiscal year.
The debt is owed to a number of sources. Individual Americans and businesses buy savings bonds and T-bills. Much of the debt is held overseas, however. This is especially true of Japan which buys large amounts of the debt to cover its trade surplus. In recent years the People's Republic of China has also become a major holder of American debt.
Probably the treasury, but don't forget that some agencies (TVA, FHLB, for example) do their own financing. In fact, the S&L Bailout bonds were called REFCO bonds, and I don't believe that they were technically direct treasury obligations.
As far as refusing goes, well, I guess the objectors would just lose their jobs and replaced with people who do as they are told. Do you expect a conscientious objector of some sort? posted by trharlan at 12:43 PM on December 6, 2004
If I get your meaning, people refuse to buy US debt all the time. At least, until the interest offered on that debt is high enough to be worth the risk that the principle will not be paid back while remaining competitive with other investments. I wouldn't buy a 60-day US T-Bill at 1.00%, but I would at 2.50%. With the US, it's not much of a concern, but Israel savings bonds, for example, offer a better return for a number of economic (and political) reasons. It's just like asking your bank for a mortgage, except that the "bank" is the entire country, plus foreign corporations, governments and individuals, and more, each with their own risk thresholds and objectives, each desiring different vehicles for assuming your debt. It *isn't* the IMF, or world bank, or other commercial banks (at least, not exclusively when we're talking about a trillion dollars). posted by loquax at 12:53 PM on December 6, 2004
Probably the treasury, but don't forget that some agencies (TVA, FHLB, for example) do their own financing.
Those are the agencies that are doing the borrowing.
Loquax describes the lenders well. His most recent comment also explains why increased government debt tends to push up interest rates (higher rates make the debt appealing to more lenders). posted by mr_roboto at 1:31 PM on December 6, 2004
Those are the agencies that are doing the borrowing.
Well, they do their own financing, too (DirectNotes)-- but I nonetheless answered a question other than the one that was asked.
mr_roboto's contention that government debt drives interest rates up is not settled economics by any means (even though I believe it to be both true and intuitive). posted by trharlan at 1:43 PM on December 6, 2004
If you are wondering who is giving the government money in the first place, the Treasury holds auctions for debt. Investors - commercial banks, mutual funds, individual investors, etc - place bids for upcoming issues and the auction winners give the government the money.
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posted by loquax at 12:40 PM on December 6, 2004