If the federal government has a budget deficit, it can sell treasury bonds to fund its spending.
The federal government of the United States of America issues Treasury bonds (T-bonds), which are debt instruments with maturities greater than 20 years. Prior to maturing and paying the owner in full, T-bonds accrue interest at regular intervals.
Treasury bonds are a subset of the larger category of treasury bills issued by the United States government. Because Treasuries are backed by the government's ability to tax its citizens, they are frequently perceived as being almost risk-free investments.
A Treasury bond is one of four financial instruments that the US Department of Treasury issues to finance the nation's expenditures. Four types of debt exist Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation-Protected Securities.
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