Thursday, June 11, 2009

The Federal Government

In its fiscal year the U.S. federal government spent over $400 billion more than it received in revenues; in 1991 the deficit figure was $320.9 billion. Those deficits presumably represented the amount of credit demanded by the federal government in those years. Currently the federal government borrows over 40 percent of all the funds borrowed on U.S. capital markets. Actually, however, the impact of federal government activity on the financial markets is even greater. the federal government is presence in the financial markets has three other sources: (1) activities of "off-budget" agencies,(2) operation of government-sponsored enterprises,and (3)provision of federally guaranteed loans.

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