The federal government has withdrawn nearly three times as much money from the U.S. Treasury as it will spend in 2012.
According to the nonpartisan Congressional Budget Office, the government will spend $3.56 trillion this fiscal year, despite the fact that it has already withdrawn $10,201,615,000,000.
Terence Jeffrey of CNS News explains the reason why:
The federal government needs to churn through trillions of dollars eachyear above the level of current annual federal spending in order tomaintain its $16 trillion debt–much of which is held in Treasury notesthat mature in anywhere from 2 to 10 years and Treasury bills thatmature in anywhere from a few days to less than a year.
By shuffling shorter-term securities, the government takes advantage of lower interest rates on these securities than for longer 30-year Treasury bonds.
If and when interest rates rise from their historic lows, however, America will be in for a costly shock. Indeed, if today’s interest rate for federal borrowing were at 2001 levels, Jeffrey says, “the cost of financing the current level of publicly held debt would exceed the cost of the current Social Security program.”