So the Treasury has already replenished its bank account in Q3 2023 with $600 bn of the $1 trillion issued. They are keeping a $750 billion cash balance. But they are still planning on selling massive amounts of new debt:
Q4 2023 $776 billion
Q1 2024 $816 billion
Q2 2024 $850 billion (my projection)
Q3 2024 $900 billion (my projection)
Total $3,342 billion.
What do they need all that money for? We already know the projected spending. The primary deficit should be about $1 trillion in FY 2024. And net interest should be about $800 billion. So I don't understand why they need more than about $2 trillion in new debt.
Even just looking at the first quarter, the deficit will be about $450 billion. So why are they selling $776 billion in new debt, especially at these high rates? What is the extra $326 billion for?
This doesn't make sense at all. We will find out soon enough.
Update (2/6/24): The Treasury will need only $202 billion in the April-June 2024 quarter, so I was way off in this post.
As for the other question I raised about Q4-2023, the actual deficit was $509 billion for the first quarter of FY 2024. And it looks the like net debt to the public increased by $608 billion (from $26.330 trillion to $26.938 trillion) so there is "only" $99 billion extra, which is almost a rounding error in Washington these days.
And if in Q3-2024 they borrow $600 billion to cover the expected deficits (not the $900 billion is mentioned above), that would mean the total borrowing in FY 2024 is about $2.4 trillion (not $3.3 trillion), and the total deficit in FY 2024 will be about $2.1 trillion, which will be the second-highest ever, after the pandemic FY 2021 (which had a $2.8 trillion deficit).
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