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Federal debt and American national interest; How the U.S. Government Can Increase Revenue and Reduce Debt

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This article will show you the current picture of the financial state of the US government. based on data from the financial statements closed on September 30, 2021.

  • US Debt Background and Its Importance
  • Overviews of financial statements; Statement of “net cost” for the year ended September 30, 2021.
  • Balance sheet for the year ended September 30, 2021.
  • US Federal Debt Breakdown.
  • Recommendations to the US government for its national interest
  1. Investment in the cement sector, modern industry.
  2. Investment in the private sector and become a subsidiary or holding company.
  3. By export increment.
  4. Investment in the steel and iron sector.

US public debt is once again ringing the alarm bell. Massive spending in response to the COVID-19 pandemic has pushed the budget deficit to levels not seen since World War II. This expansion follows years of bloated debt – totaling almost $17 trillion in 2019 – which will now be even harder to reduce. Raising the debt ceiling, the legal limit on public borrowing, has become an uphill battle in Congress.

With pandemic-related spending, debt is now expected to be double the size of the economy by mid-century. Other experts say the United States can safely afford to borrow more because it pays relatively little interest due to its unique position in the global economy.

The US debt is the sum of all outstanding debts owed by the federal government. On December 16, 2021, it surpassed $29 trillion for the first time. The US Treasury Department tracks the current total stock of government debt and this figure changes daily. New York’s debt clock is also following him.

The majority of the national debt is debt held by the public. The government owes it to buyers of U.S. Treasuries, including individuals, corporations, and foreign governments.

The remaining part is intra-government debt. The Treasury owes this debt to its various departments that hold Government Account Series securities. The biggest owner is the Social Security Trust Fund.

Why is the United States so indebted?

There are a few important reasons why the size of the national debt matters

Federal budget deficits

The national debt is an accumulation of federal budget deficits. Every new spending program and tax cut adds to the debt.

Although the national debt under Obama rose the most in dollar terms, it was not the largest percentage increase. This honor goes to President Franklin D. Roosevelt. He only added about $236.1 billion between 1933 and 1945, but that was an increase of about 1,048%.3 He did this to fight the Great Depression and prepare the United States to enter in World War II in the early 1940s.

Social Security Trust Fund

Each president borrows from the social security fund. Over the years, the Fund collected more revenue than it needed from payroll taxes that benefited the baby boomer generation.

Ideally, this money should have been invested to be available when members of this generation retire. Instead, the Fund was ‘lent’ to the government to finance increased spending. This interest-free loan helps keep Treasury bond interest rates low, allowing for more debt financing. But, it must be repaid through higher taxes as more and more people retire.45

Investment from other countries

Foreign countries like China and Japan are buying treasury bonds to invest their U.S. dollar-denominated export earnings. their exports.

Low interest rates

The US government took advantage of low interest rates. It could not continue to run budget deficits if interest rates soared. Buyers of Treasuries are convinced that the United States has the economic power to redeem them. During recessions, foreign countries increase their holdings of Treasury bonds as a safe haven investment.

The debt ceiling

On December 14, 2021, the debt ceiling was raised again, by $2.5 trillion – the new limit is approximately $31.4 trillion.9. This increase was the largest dollar increase in the national debt.

Statement of operations and changes in net position for the year ended September 30and .2020 is negative $26,796.3 billion.

Breakdown of US debt and interest payable

Treasury (government) securities breakdown includes treasury bills, treasury bills, treasury bonds, Treasury Inflation Protected Securities (TIPS) FRN, total marketable securities ended September 30and 2020 $20,352.8 billion. Non-marketable securities represent $640 billion. Securities Agency $20 billion. Interest payable $70.9 billion. The total federal debt and interest is $21,082.9 billion.

Recommendations:

Investment in the cement sector: US government can make investments by borrowing treasury bills and making investments in the cement sector, the risk and returns are directly proportional to each other. There are many cement quarries located in the central and eastern United States

By investment you can be a subsidiary or a holding company, depends on the percentage of investment via treasury bills or treasury bills; hence, revenues will be increased.

Investment in the steel industry:

About the Top 10 US Steel Mills: These steel mills are still operating and supporting the US economy by producing essential raw materials.

California Steel Industries, Inc. Located in Fontana, California, California Steel Industries, Inc. is one of the largest factories in the country with 1,000 employees. This plant offers the widest selection of flat-rolled steel products in the West.

Evraz, Inc. The Pueblo plant is one of six North American production sites for EVRAZ. With 1,000 employees, it is one of the largest in the country and houses one of EVRAZ’s product technology centers. This manufacturer offers steel and coiled sheets, rails, pipes and recycling services.

EVRAZ Portland. The EVRAZ site in Portland is the only sheet rolling mill in the West. Its 500 employees also operate quenching and tempering lines.

Carlton Forge Works Located in Paramount, California, Carlton Forge Works and its 350 employees produce highly specialized bushings and forgings designed for use primarily in the aerospace and nuclear industries, among others.

Tube Specialties Co., Inc. Tube Specialties Co., Inc. is a Troutdale, Oregon manufacturer with 300 employees. This plant specializes in the production of original parts for the automotive industry and steel tubes for a variety of sectors.

Steel Scape, LLC

Steelscape, LLC is a 250 employee company located in Kalama, Washington. In addition to producing metal, this manufacturer uses innovative methods to work metallized steel and pre-painted steel.

Eaton Metal Products Co., LLC.With 200 employees, Eaton Metal Products Co., LLC is a fully integrated company located in Denver, Colorado, handling everything from design to manufacturing.

Superior steel fabrication, Superior Steel Fabrication is a Eugene, Oregon company with 200 employees. They specialize in sheet metal fabrication, metal fabrication and precision machining. Other capabilities of this manufacturer include powder coating and plating.

.CMC Steel Fabricators, Inc. This Kalopei, Hawaii plant is one of many facilities operated by CMC Commercial Metals. Its 190 employees produce concrete steel for the construction industry.

Tri-Point Oil and Gas Production Systems, LLC. Tri-Point Oil & Gas Production Systems, LLC is an end-to-end company that offers oil and gas well engineering, production, installation, field service and more.

The United States can invest as a holding or subsidiary in the above industries and earn a lucrative amount of dividends.

The investment should also be made internationally in different portfolios.

Per export increment; By increasing exports and sales to Europe, the fiscal deficit of Canada and other countries will be reduced and cash flow will be increased.

Quotes:

https://www.fiscal.treasury.gov/

https://www.cemnet.com/global-cement-report/country/united-states

https://www.industryselect.com/blog/top-us-iron-and-steel-mills