Marino on Money: April 21
This week, Marino on Money addresses the question of how our government manages its money.
Q: Who do we borrow from?
A: The majority of the money our government borrows is from foreign investors, or foreign central banks. We do this because our economy does not generate enough tax revenue to pay all of our bills. Our government needs to borrow money, just like we would borrow money. Our government runs a deficit. The Congressional budget office expects the deficit to be roughly $1 trillion dollars this year. Meaning, our government will spend $1 trillion more than we make in 2009. They also estimate we’ll spend $9.3 trillion more than we make in the next 10 years. Scary.
So, how do we borrow all of this money? Investors, like foreign central banks will loan money to us for a period of time. We pay them interest, and eventually we must pay back the principal. The national debt is now over $11 trillion. We are paying interest on it, and eventually, we need to pay it back. We borrowed the money for a specific period of time. We will need to repay it. How are we going to do that? There are a couple of possibilities. We will look at those tomorrow.
Ross Marino will be answering questions on our 5 o’clock news every Tuesday, Wednesday and Thursday.
If you have a question, visit our Marino on Money page.
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