Bonds and Surplus Value. Rates of Interest and Capital.
With the focus on the debts of the state, the question in the bourgeois press seems to only be what to do with the money. The 2022 state’s whole budget was 6.27 trillion dollars. “In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit.” more about this below.
“The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing. In fiscal year (FY) 2022, the government spent $6.27 trillion, which was more than it collected (revenue), resulting in a deficit.”
“The U.S. Constitution gives Congress the ability to create a federal budget – in other words, to determine how much money the government can spend over the course of the upcoming fiscal year. Congress’s budget is then approved by the President. Every year, Congress decides the amount and the type of discretionary spending, as well as provides resources for mandatory spending.”
“Money for federal spending primarily comes from government tax collection and borrowing. In FY 2022 government spending equated to roughly $3 out of every $10 of the goods produced and services provided in the United States..”
Fiscal data treasury.com
“A budget deficit occurs when the money going out exceeds the money coming in for a given period. On this page, we calculate the deficit by the government’s fiscal year.”
“In the last 50 years, the federal government budget has run a surplus five times, most recently in 2001.”
“To pay for government programs while operating under a deficit, the federal government borrows money by selling U.S. Treasury bonds, bills, and other securities. The national debt is the accumulation of this borrowing along with associated interest owed to investors who purchased these securities.”
“A budget deficit occurs when money going out (spending) exceeds money coming in (revenue) during a defined period. In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit. The amount by which spending exceeds revenue, $1.38 trillion in 2022, is referred to as deficit spending.”
Ibid. Treasury.com
Here at least we finally start to cut to the chase. “To pay for government programs while operating under a deficit, the federal government borrows money by selling U.S. Treasury bonds, bills, and other securities. The national debt is the accumulation of this borrowing along with associated interest owed to investors who purchased these securities.”
There is the discussion we should be having. It is not what to spend the debt on, social welfare, the military, etc. It is the debt itself.
The bond market is where the money that pays the deficit comes from. The state issues paper on its debts, payable at a later date, with surplus value, interest, attached to the money. The money ultimately comes from taxes, which are a subdivision of profits.
It doesn’t mean your boss has suddenly become generous; the repressive function of the state is also present, and he funds this through the taxes on the paycheck, for instance. His ownership of this money is shown in times of crisis by bailouts of banks, the clergy, business owners. Generally under capitalism the only time the state owns something is if it is being bailed out.
“At $4 trillion, the assortment of grants, loans and tax breaks (paid out for Covid) exceeded the cost of the Afghanistan war. More than half, or $2.3 trillion, went to businesses which in many cases were not required to show they were impacted by the pandemic or keep workers employed.
Oct 5, 2020
Google search size of govt bailout during covid usa
Which is where the taxes go in times of crisis, to keep the investors making a profit. If you have ever tried to retire, you know the money you were taxed all those years of working did not go into your bank account.
The bonds that are sold are paid for by taxes. The commodity they are speculating on has yet to exist, materially.
Any assets of the capitalist state that are capable of creating a profit are always sold off when deemed able to create surplus value.
As I stated earlier taxes are not the property of the worker, any more than the surplus value, profit, is. Regardless of the fact a dollar amount is printed on every paycheck with the word taxes on it, it is no more the workers property than the other section of the workday worked without pay, the surplus labour. In the latter case it is obvious the division of paid and unpaid labour is in the hands of the employer.
The bonds carry a rate of profit. For example:
“The 10 Year Treasury Rate is at 3.70%, compared to 3.72% the previous market day and 2.86% last year. This is lower than the long term average of 4.25%. The 10 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 10 years.
Google search 10 year bond rate
“What Is a 10-Year Treasury Note?
“The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The U.S. government partially funds itself by issuing 10-year Treasury notes.
“Understanding 10-Year Treasury Notes
“The U.S. government issues three different types of debt securities to fund its obligations: Treasury bills, Treasury notes, and Treasury bonds. Bills, bonds, and notes are distinguished by their length of maturity.
“Treasury bills (T-bills) have the shortest maturities, with durations only up to a year. The Treasury offers T-bills with maturities of four, eight, 13, 26, and 52 weeks. Treasury notes have maturities ranging from a year to 10 years, while bonds are Treasury securities with maturities longer than 10 years.
Investopedia
The idea is the money paid for the bond will return with a profit to the buyer; with interest. Whether this is paid in small portions or in a lump sum really makes little difference; it pays out the surplus value. In the end the value of the $100 bond is 3.7%, or a profit of $3.70 every 6 months.
So we see what is really being discussed as regards the debt limit. It is how much of the capitalist’s money will be raised this year from taxes, with interest, what will be indebted at 3.70% interest every 6 months in 10 years.
In attempting to make it an issue of bread and butter to the worker, we see no mention of bonds in the bourgeois press. Yet this is exactly what we are talking about.
This money, the 1.38 trillion dollar deficit, is all surplus value. The whole state budget of 6.27 trillion dollars, is all from the unpaid section of the workday. And this is not the average rate of profit the capitalists are bringing in, the average rate of profit is probably higher than 3.7%. There is a general knowledge among capitalists what the average rate of profit is, but they are like a freemasonry and will not provide this for the worker to digress upon.
Nevertheless we see the real issue of what the debt really represents is more difficult to get at than simply how the money is going to be divided up. The mechanism of bond markets is the interest is paid for by taxes. The whole discussion comes back to speculation on the tax dollars, the bond market. It seems unlikely the Republican bourgeoisie will upset the apple cart, so to speak. How much more likely are you to find yourself investing in 10 year bonds if you are a member of this group? They stand to benefit most from the debt. Look there they are speculating on it. Their following believes this money to be theirs, that the taxes are their property. They appear to be legitimate, at least if you accept capitalism.
The state is used primarily for security. Two thirds of the money spent goes for this. We know interest payments on the 32 trillion dollar debt take a trillion dollars a year, paid to bond owners. There is no “National Debt factory” somewhere in Wisconsin producing commodities. Rather we know the debt is all speculation on tax money,
Trump and Musk may be able to save a little by making government smaller, by removing bureaucrats. But it is nowhere near what is being paid out every year as interest on the national debt. Have they even saved a trillion dollars yet?
The bonds are still being sold. The Treasury’s papers are still being circulated. Until you approach the real source of the national debt, the bond market, you will never be able to contain it.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
Ecological Era 