Q:

How is the gross federal debt computed?

A:

Quick Answer

The gross federal debt is computed by subtracting all surpluses from the sum of all deficits. Budget deficits occur when expenditures exceed receipts within 1 fiscal year, while budget surpluses occur when receipts exceed spending.

Continue Reading

Full Answer

Each year, a mandatory budget is prepared and proposed by the U.S. President to be appropriated and approved by Congress. This federal budget covers 1 fiscal year, which runs from October 1 to September 30. When a budget deficit occurs, the government borrows money to fund the deficit by issuing debt.

The government issues debt by selling securities, including bonds, saving bonds, notes and treasury bills, to government trust funds and to the public. In terms of debt ownership, the gross federal debt is divided into debt held by the public and intragovernmental holdings. The debt held by the public pertains to the total federal debt held by private individuals, business organizations, local, state or international governments, federal reserve banks and other private agents. Credit markets are typically the sources of funds coming from these sectors. Social Security trust funds and revolving funds usually bankroll intragovernmental holdings. The gross national debt can also be expressed as the total public debt outstanding. This amount changes once on a daily basis and is posted on TreasuryDirect.

Learn more about US Government

Related Questions

Explore