Treasury announces record borrowing of $2.99 trillion

Marco Green
May 5, 2020

A Treasury official said Monday the us will borrow $2.999 trillion in privately held net marketable debt in the second quarter, assuming an end-of-June cash balance of $800 billion. In comparison, the Treasury's net borrowing in the last fiscal year was $1.28 trillion.

Treasury also projected that it will have to borrow an additional $677 billion in the July-September quarter. In a single quarter, the government will borrow more than twice as much as it did all of previous year.

Visit Business Insider's homepage for more stories.

The second-quarter sum is more than five times the amount it was loaned to pad against the 2008 financial crisis, and more than double what it borrowed in all of 2019.

Treasury said the huge sum is needed to fund the almost $3 trillion the government has approved in various programs to support workers and businesses with direct economic payments, the Paycheck Protection Program and other efforts.

The Treasury said Monday it expects to borrow almost $3 trillion in the April-June quarter.

Treasury originally had estimated to pay down the debt this April-June quarter by $50 billion.

Any additional government relief issued by Congress or the central bank would likely drive the Treasury to borrow more later in 2020.

"Borrowing needs are skyrocketing as Treasury needs cash to fund stimulus measures and to compensate for a plunge in revenues caused by massive job losses", said Nancy Vanden Houten, an economist at Oxford Economics.

Despite the surge in federal debt, the government's borrowing costs remain low.

The Congressional Budget Office is forecasting that the government will run a record deficit of $3.7 trillion this year, far above the $1 trillion-plus annual deficits recorded from 2009 through 2012 when the government was fighting the 2008 financial crisis and a deep downturn that followed.

The Trump administration and lawmakers in both parties are looking to spend more, setting aside concerns about the ballooning federal deficit, which is causing a debt burden that's poised to eclipse the record seen in the wake of World War II as a share of the economy.

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER