This article will show you the current picture of Financial Statement of US Govt. based on the data of Financial Statement ended Sep 30th 2021.
- Background Of US Debt and How it is big
- Glimpses of Financial Statement; Statement of “Net Cost” for the year ended Sep 30th, 2021.
- Balance Sheet for the year ended Sep 30th 2021.
- Break up of US Federal Debt .
- Recommendations to US Government for its national interest
- Investment in Cement Sector , modern industry.
- Investment in private sector and become subsidiary or Holding Company.
- By export increment.
- Investment in Steel & Iron sector.
The U.S. national debt is once again raising alarm bells. The massive spending in response to the COVID-19 pandemic has taken the budget deficit to levels not seen since World War II. This expansion follows years of ballooning debt—totaling nearly $17 trillion in 2019—that will now be even more difficult to reduce. Raising the debt ceiling, the legal limit on government borrowing, has become a perennial fight in Congress.
With pandemic-related spending, the debt is now expected to be twice the size of the economy by midcentury. Other experts say the United States can safely afford to borrow more since it pays relatively little interest due to its unique position in the global economy.
The U.S. debt is the sum of all outstanding debt owed by the federal government. On December 16, 2021, it surpassed $29 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.
The majority of the national debt is debt held by the public. The government owes this to buyers of U.S. Treasury notes including individuals, companies, and foreign governments.
The remaining portion is intra governmental 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 Does the U.S. Have So Much Debt?
There are a few significant reasons as to why the size of the national debt is big
Federal Budget Deficits
The national debt is an accumulation of federal budget deficits. Each new spending program and tax cut adds to the debt.
Although the national debt under Obama grew the most dollar-wise, it wasn’t the biggest percentage increase. That 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 U.S. to enter World War II at the start of the 1940s.
Social Security Trust Fund
Every president borrows from the Social Security Trust Fund. Over the years, the Fund has taken in more revenue than it needed through payroll taxes leveraged on the baby boomer generation.
Ideally, this money should have been invested to be available when members of that generation retire. Instead, the Fund was “loaned” to the government to finance increased spending. This interest-free loan helps keep Treasury bond interest rates low, allowing more debt financing. But, it must be repaid by increased taxes as more individuals retire.45
Investment from Other Countries
Foreign countries like China and Japan buy Treasuries to invest their export proceeds that are denominated in U.S. dollars.6 They are happy to lend to America—their largest customer—so that it will keep buying their exports.
Low Interest Rates
The U.S. government has benefited from low interest rates. It couldn’t keep running budget deficits if interest rates skyrocketed. Purchasers of Treasury bills are confident that the U.S. has the economic power to pay them back. During recessions, foreign countries increase their holdings of Treasury bonds as a safe-haven investment.
The Debt Ceiling
On Dec. 14, 2021, the debt ceiling was raised once again, by $2.5 trillion—the new limit is around $31.4 trillion.9. This increase constituted the largest dollar amount increase of the national debt.
Statement Of Operation and changes in Net Position for the Year ended September 30th ,2020 is negative 26,796.3 billions of dollar.
Breakup Of US Debt & Interest Payable
Breakup of Treasury securities (public) consists of Treasury bills , Treasury notes ,Treasury bond ,Treasury inflation-protected securities(TIPS) Treasury FRN, total marketable securities ended Sep 30th 2020 20,352.8 billion dollars. Non marketable securities are 640 billion dollars. Agency securities 20 billion dollars. Interest payable 70.9 billion dollars. Total federal debt and interest equals to 21,082.9 billion dollars.
Investment in Cement Sector: US Govt. can do investment by borrowing Treasury bills and do investment in cement sector, risk and returns are directly proportionate to each other. There are lot of Quarries of cement are located in central and eastern US
By investment you can be a subsidiary or holding, depends upon the percentage of investment via Treasury bills, or Treasury bond; hence revenue will be increased.
Investment in Iron and Steel Industry:
About the Top 10 U.S. Iron and Steel Mill: These iron and steel mills are still operating and support the U.S. economy by producing essential raw materials.
California Steel Industries, Inc. Located in Fontana, California, California Steel Industries, Inc. is one of the largest mills in the country with 1,000 employees. This mill offers the widest selection of flat rolled steel products in the West.
Evraz, Inc. The Pueblo mill is one of the six EVRAZ North American production sites. With 1,000 employees, it’s among the largest in the country and is home to one of EVRAZ’s Product Technology Centers. This manufacturer offers steel and coiled plates, rails, pipes, and recycling services.
EVRAZ Portland. The EVRAZ Portland location is the only plate mill in the West. Its 500 employees also operate quench and tempering lines.
Carlton Forge Works Located in Paramount, California, Carlton Forge Works and its 350 employees produce highly-specialized rings and forgings designed for use mainly in the aerospace and nuclear industries, among other fields.
Tube Specialties Co., Inc. Tube Specialties Co., Inc. is a Troutdale, Oregon, manufacturer with 300 employees. This mill specializes in producing OEM parts for the automotive industry and steel tubes for a variety of sectors.
Steel scape, LLC
Steel scape, LLC is a company with 250 employees located in Kalama, Washington. Besides producing metal, this manufacturer uses innovative methods to work with metallic-coated 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, that handles everything from design to manufacturing.
Superior Steel Fabrication , Superior Steel Fabrication is a Eugene, Oregon, company of 200 employees. They specialize in sheet metal manufacturing, metal fabrication and precision machining. Other capabilities of this manufacturer include powder coating and plating.
.CMC Steel Fabricators, Inc. This Kalopei, Hawaii, mill is one of the many facilities operated by CMC Commercial Metals. Its 190 employees produce concrete reinforcing steel for the construction industry.
Tri-Point Oil & Gas Production Systems, LLC. Tri-Point Oil & Gas Production Systems, LLC is an end-to-end business that offers engineering, production, installation, field service and more for oil and gas wells.
US can do investment as holding or Subsidiary company in the above industries and earn lucrative amount of dividend.
Investment should also be made internationally in different Portfolio.
By Export Increment ; By increasing export and Sales to Europe , Canada and other countries fiscal deficit will be reduced and cash flow will be increased.