Economist: ‘True’ Federal Debt Masked by Draining U.S. Treasury

Janet Yellen
by Bethany Blankley


The federal debt continues to climb to unprecedented levels, but the “actual, true” debt is higher if the Treasury weren’t being drained, a national economist says.

Citing Bureau of the Fiscal Service data, E. J. Antoni, Ph.D., an economist at the Heritage Foundation, argues that as the federal debt increases, the “true daily deficit” is being masked by the amount of cash being drained from the U.S. Treasury by Treasury Department Secretary Janet Yellen.

The federal debt increased Friday by $10.9 billion, “but the true daily deficit was worse, requiring Yellen to drain another $5.7 billion from the Treasury cash account,” Antoni said on X, formerly Twitter. He asked if Yellen doing so was an “election year ploy … to make the deficit and debt look smaller than they really are?”

The U.S. Treasury account currently sits at $52 billion below the floor threshold Yellen set of $750 billion, he notes. He’s referring to net marketable borrowing estimates the Treasury announced in January for the January-March 2024 and April-June 2024 quarters.

During the January-March 2024 quarter, the Treasury Department said it “expects to borrow $760 billion in privately-held net marketable debt, assuming an end-of-March cash balance of $750 billion.”

During the April-June 2024 quarter, it said it expected to borrow $202 billion in privately held net marketable debt, assuming an end-of-June cash balance of $750 billion.

During the October-December 2023 quarter, it said it borrowed $776 billion in privately-held net marketable debt and ended the quarter with a cash balance of $769 billion.

As of May 28, the national debt was more than $34.5 trillion. The national debt “is the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history,” the Treasury Department explains. It’s comprised “of distinct types of debt, similar to an individual whose debt may consist of a mortgage, car loan, and credit cards.”

Different types of debt include non-marketable or marketable securities, it explains, adding that the debt can be held by the public or the government. It also explains that the national debt isn’t a new phenomenon: “the U.S. has carried debt since its inception,” it says.

“The national debt enables the federal government to pay for important programs and services for the American public,” it adds.

The national debt is separate from the deficit. A deficit “occurs when the federal government’s spending exceeds its revenues,” the Treasury explains. The national deficit is currently more than $855 billion fiscal 2024 to date. As deficits accumulate, the national debt rises.

Last Wednesday, after $9 billion was added to the national debt, Antoni notes $7 billion was drained from the Treasury’s cash account.

“Looks like this is Yellen’s play to help her boss’ reelection effort: federal debt rose $9 billion yesterday and it would’ve been higher, but another $7 billion was drained from the Treasury’s cash account,” he said, adding “a huge disparity” exists between the debt figure and reality.

He added that the federal debt “fell” by $17 billion last week “only because Yellen drained the Treasury cash account by another $28 billion – is this the play during an election year to artificially make the federal debt look smaller than it is?”

Critics note that Congress has spent more money on interest on the national debt this year alone than it spent on both the national defense budget and Medicare, The Center Square reported.

Spending on interest on the national debt is also only expected to increase, the Congressional Budget Office has projected, with interest costing more than double than the U.S. GDP over the next 30 years.

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Bethany Blankley is a contributor to The Center Square.
Background Photo “Treasury Department Building” by Roman Boed. CC BY 2.0.





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