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Politics : Foreign Affairs Discussion Group

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To: bentway who wrote (220589)	2/24/2007 3:53:01 AM
From: Elroy	Read Replies (3) of 281500

"when it matures, is “paid back” using the proceeds obtained by selling a new Treasury security to the public. In effect, the debt principal is never retired; it is merely rolled over and over, perpetually." What's the difference between that and what every large telephone company does? Verizon has about $5 billion in cash and $35 billlion in debt. It repays the debt when it comes due, and then issues more debt. All $35 billion doesn't come due at the same time, so its an ongoing process. In the meantime, VZ has tremendous positive cash flows which is used to pay dividends, expand operations and service debt. Same with the US government but the cash flows come from taxes rather than service revenues.

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