The U.S. Federal Deficit fell to 15.6% of federal government receipts in Q3 2005. At this level, the deficit was 3.3% of household income, which was about the same ratio to household income as in 1995. (See Flow of Funds Tables F106 and F100, and the graph, below.) Since taxation of individuals is […]

The primary buyers of the Treasury notes and bonds that the U.S. government issues to cover the shortfall between government spending and tax receipts, are foreign investors that generally pay for the bonds with dollars obtained by selling more goods and services to the U.S. than they purchase. Over the decade, 1995-2004, the U.S. Treasury issued […]

Net new issues of agency securities turned negative in Q3 2005, as a result of the federal government’s crackdown on operations of Fannie Mae in late 2004. (See: Flow of Funds Table F210, Agency- and GSE-backed Securities.) This represents a withdrawal of over US$540 billion in the annual supply of these popular debt securities […]