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If Congress stopped borrowing money, how long would it take to pay off the national debt?

My question assumes—perhaps incorrectly?—that every dollar the Federal government owes must be paid back on some schedule. So if Congress stopped borrowing, presumably the debt would be paid off after a certain amount of time. How long would that take?

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    It seems the maximum maturity for Treasury bonds is 30 years, if that’s what you are asking. How is that about politics, though? – chirlu Sep 10 '18 at 21:57
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    @chirlu According to our Help questions about the costs and benefits of legislation are on-topic. This is both. – indigochild Sep 10 '18 at 22:26
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    @indigochild: I don’t see how this is about costs and benefits. (Then again, I may not understand the question correctly.) If the mortgage for my house runs for seven years and I’m determined not to borrow anything ever again, then I will be debt-free in seven years. The question doesn’t ask whether that’s possible or whether it makes sense or what could be done to achieve it, it just asks for the longest-running outstanding credit. – chirlu Sep 10 '18 at 23:07
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    The title question can be read as contradictory to the question "Congress stopped borrowing, presumably the debt would be paid off after a certain amount of time.", although it is also possible to read them in a consistent manner. What exactly do you mean? – ohwilleke Sep 11 '18 at 0:08
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    The question is based on a misunderstanding about how national debt works. The answers clear up that misunderstanding and explain how the process actually works. This question is on topic and has value for other people with this misunderstanding going forward. It doesn't need to be closed. – lazarusL Sep 12 '18 at 13:35
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My question assumes—perhaps incorrectly?—that every dollar the Federal government owes must be paid back on some schedule.

You assume incorrectly.

By definition, if there is no deficit and no surplus, then the Treasury makes interest only payments on a net basis, and issues one new dollar of federal debt for each dollar repaid. The maturities of particular bond series that are issued by the Treasury are irrelevant as a result. Also, a large share of the national debt is maintained only in government accounting ledgers and has no maturity date (e.g. the "Social Security Trust Fund").

To be clear, "deficit" is an income statement concept and "national debt" is a balance sheet concept. "Borrowing" can be used in either sense and I have read the OP in the only sense that it can possible be consistent and form a well posed question.

A deficit means "net borrowing", i.e. spending more than incoming government revenue. One would need massive surpluses and not merely the absence of a deficit not to issue new national debt instruments all together, and the mix of maturities varies significantly from month to month as a matter of Treasury Secretary discretion.

Individual national debt instruments like treasury bonds, savings bonds, and treasury bills are paid off from time to time, but the Treasury simply issues new ones at auction many times a year to borrow funds to make up for those that were paid off. One of the more technical, but important, tasks of the Secretary of Treasury through his or her deputies, is to decide what maturities of particular national debt instruments to issue at any given time.

The exact mechanics of the Treasury bond markets is beyond the scope of Politics.SE but it is it outlined in general here. Basically, the Treasury Department has standing orders to continually refinance the national debt.

So if Congress stopped borrowing, presumably the debt would be paid off after a certain amount of time. How long would that take?

No. It would never be paid back. The national debt would stay the same forever.

If you are paying off the national deficit from sources other than cash reserves, then you have, by definition, a surplus.

  • If I asked instead, “When would the debt—excepting Social Security and Medicaid liabilities—be paid off if the government stopped issuing national debt instruments?” would that have a straightforward answer? – adam.baker Sep 13 '18 at 12:52
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    @adam.baker It would have an answer, which would be equal to the longest maturity treasury bond currently outstanding, which is 30 years. investopedia.com/terms/t/treasurybond.asp – ohwilleke Sep 13 '18 at 14:52
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You say

How long would it take to pay off the U.S. national debt if deficits were eliminated?

and

My question assumes—perhaps incorrectly?—that every dollar the Federal government owes must be paid back on some schedule.

These are in conflict. Eliminating the deficit does not pay off the debt. If there is a zero deficit, the government can still borrow money to pay off previous bonds. So the answer to the title question is an infinite amount of time.

If you really want

So if Congress stopped borrowing, presumably the debt would be paid off after a certain amount of time. How long would that take?

Bonds take up to 30 years to mature, although most debt will mature within eleven or twelve years. So the literal answer is thirty years.

A sudden stop is unlikely though. The federal budget is only $3.8 trillion a year. That's roughly the amount of debt that the United States will refinance in the coming year. Taxes are only about $3.2 trillion. So to do a sudden stop, the US would have to more than double its revenues. Or it would have to completely stop spending and still increase revenues.

Source for official debt data.

  • "Taxes are only about $3.2 billion." Is that a typo? – Acccumulation Sep 11 '18 at 22:03
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I think your understanding of national debt is incorrect. Much of the debt isn't like a mortgage, with a schedule of payments to be made that include both principal and interest so that after X years the debt is eliminated. Instead, much of the debt is interest-only, so payments are required (and built into the budget) but no matter how much we repay as interest, the principal remains. What you probably want to ask is "how much of an annual surplus would we need to pay down the debt in X years?"

  • Each individual note is mortgage-like, but the debt as a whole is negatively amortized (the principal keeps getting larger and larger), rather than positively amortized like a mortgage. Also, it's spelled "principal". – Acccumulation Sep 11 '18 at 22:07
  • @Acccumulation gah, I always forget which is principal vs principle, thanks. – David Rice Sep 12 '18 at 13:35
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Naive fuzzy answer:

Let's suppose from now on Congress stops spending more than the annual taxes produce. And we should also suppose they manage to do this without any great violence, as the OP didn't mention violence or draconian measures. Which implies some sort of competent, judicious, and appropriate combination of measures to avoid spending too much -- either by somehow:

  • increasing the national income, might be higher taxes and conquest, but let's suppose some other method such as an amazingly successful annual bake sale by the military who have just devised new and advanced baking techniques, and...

  • reducing national expenses, might be by cutting services and breaking promises, but no, instead let's suppose every department becomes amazingly efficient at reducing waste, crime, and corruption.

Via such measures, an annual surplus S for paying off that debt. Then we divide the total debt D by the annual surplus, and D/S is the number of years it would take. The lower the surplus the longer it would take, the higher the surplus the shorter the time.


Note: So far most of the answers here seem focused on minutia, such as those stricter usages of common terms most agreeable to accountants and economists. But since the vocabulary of those professions is often designed to conceal as much it reveals, (i.e. accountancy jargon enables crafty "tax avoidance" methods, and the many schools and paid partisans of economics each use the same terms in different senses to justify policies well correlated with their patrons' financial ambitions), the result of invoking them is to replace one practical question with dozens of academic questions, several of which seem mutually exclusive.

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If Congress stopped borrowing money, how long would it take to pay off the national debt?

There is no way to accurately make such an estimate. It's anybody's guess.

If the government were to stop borrowing money, then all economic activity stemming from that borrowed money would come to a grinding halt. That would have a ripple effect across the U.S. — and actually the world — economy.

A great deal of economic activity and trust in U.S. currency is based on the government's ability to borrow. If this option is taken off the table, expect a loss of trust and confidence in U.S. markets.

Bottom line: There is no way to know how things would turn out. I say "really bad". My general best-case-scenario guess is:

Halting government borrowing would slow down the economy, hurt America's credit rating, and place us near default. Paying down the debt would take longer than if the borrowing continued.

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    The government has ceased to engage in deficit spending on multiple occasions with no ill effects economically, and many state and local governments are required as a matter of law to refrain from deficit spending. – ohwilleke Sep 11 '18 at 0:00
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    Okay. But that's not the question. This question is about a HUGE government with a $21 trillion debt stopping all borrowing."If Congress stopped borrowing money, how long would it take to pay off the national debt?" That's the question I answered. Temporarily ceasing deficit spending, as has been done, and smaller scale legally-mandated balanced budgets, as you point out in your comment, are not relevant here (I think; could be wrong). @ohwilleke – Michael_B Sep 11 '18 at 0:04
  • You are confusing deficits and borrowing, which are period of time things, with the national debt, which s a point in time thing. From an accounting perspective, a deficit is a statement about an income statement, while a national debt is a statement about a balance sheet. – ohwilleke Sep 11 '18 at 0:06
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    "You are confusing deficits and borrowing.." .. me or the OP? :-) – Michael_B Sep 11 '18 at 0:08

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