Econ 4.3

Monday, April 12, 1999

Announcements: Homework is due on Friday. Online quiz will be taken offline on Friday.

Lecture notes:  

US Debt @ 4/12/99, 7:14 am

• $5,665,480,356,644.83
• Debt is oppressive, unless you go bankrupt, you have to pay it

Ownership of US Public Debt

• Bureau of the Public Debt
• Federal Debt Outstanding, December 1998
• $5,555.6 billion + total outstanding
• 1,756.6 billion held in US government Accounts
• 458.1 billion held in Federal Reserve Banks
• 3,331.9 billion in privately held debt

Federal Debt Finance and Interest Rates

• $5,555.6 billion in outstanding debt
• $222.2 billion in interest at 4% Interest
• $277.8 billion in interest at 5% Interest
• $333.3 billion in interest at 6% Interest

• A huge chunk of revenue goes to paying off bond holders

Ownership of Privately Held US Public Debt

• $3,334.0 billion in privately held debt
• 215 billion in commercial banks
• 351.6 billion in individual debt
• 186 billion in Insurance companies
• 105.8 billion in money market funds
• 267.9 billion in corporations
• 490 billion in state and local governments
• 1,276.3 billion in foreign and international investment

1998 Interest Paid on US Federal Debt

• $363,823,722,920.26
• US debt on 4/2/99 at 7:51 am
• $5,665,492,644,429.16
• Increase of $12,300,000 since the beginning of class
• Even with balanced budget it is still going up