4 ms·
Does the debt servicing include repaying the principal of maturing treasuries or just the interest? I haven’t been able to figure out if the principal is not co
by drivebyhooting 2y ago
Does the debt servicing include repaying the principal of maturing treasuries or just the interest?
I haven’t been able to figure out if the principal is not counted in these numbers because it is getting refinanced by rolling over to new treasuries.
If so, it’s like continuously rolling over an Interest Only loan and taking more and more out over time to refinance the ballooning principal.
- iamthirsty 2y agoIt's both, although an extremely low percentage of people, IIRC, actually "cash out", most just roll the funds into a new bond once the previous one matures.
- drivebyhooting 2y agoSo you mean 800B includes the principal repayment?
- deleted 2y ago[deleted]
- csomar 2y agoAs far as I know, only the interest is considered as an expense. The principal is not accounted but I might be corrected.
- iamthirsty 2y agoIt does, but like I said most people just automatically buy new bonds, instead of actually removing the money from the Government.