U.S. National Debt Paydown Expected this Quarter

April 30th, 2013
in econ_news, syndication

Econintersect:  The headline is no joke.  The U.S. Treasury expects to reduce the breaking-news-130px7national debt with a $35 billion surplus in the second quarter of 2013.

Only two months ago the projection had been for a $103 billion deficit.  Details of the quarterly borrowing schedule are due out tomorrow (Wednesday 01 May 2013).  The last time there was a quarter with a reduction in the national debt was in 2007.  And before that there were several quarters with national debt reduction 1998-2000. And before that it happened in 1969-1970.

Follow up:

What do those three previous debt paydowns have in common?  They all preceeded recessions.

The likelihood of a persistence of debt reduction beyond the current quarter is unlikely.  The Treasury expects the national debt to be growing again with $223 billion needed in new debt in the third quarter.  For the entire fiscal year 2013 the CBO (Congressional Budget Office) estimated (05 February 2013) a deficit of $845 billion.  For FY 2014 the estimate was $616 billion and for 2015 $430 billion.


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