The U.S, Treasury’s Bureau of Public Debt carried out 19 “auctions” in February and raised $408.5 billion by selling treasuries.

In February, the national debt went up $70.5 billion. Of this amount, $65.2 billion came from borrowing from investors under contract (the auctions above) while $5.3 billion came from entitlements like Social Security and Medicare that produced surpluses the government took and spent elsewhere while awarding us debt. Isn’t that nice? We give them extra entitlement money and they give us dollar-for-dollar debt in return. It’s a miraculous scam.

The $338 billion balance went towards paying off maturing securities which, in February, must have come due at an average rate of $12.1 billion per day, weekends and holidays included.

The only way to pay down the investor side of the national debt (what the government calls “Public Debt”) is to pay off securities as they mature and not immediately renew them, not immediately replace them with new borrowing. To maintain the debt level is why we borrowed $338 billion in February and it happens every month although the beginning of the calendar year seems heaviest. It’s an expensive holding action. It’s also very much like transferring debt from one credit card to another.

Put another way, as long as we borrow the money to pay off maturing securities we are automatically replacing the securities we redeem.

Mr. Van Zeck, Commissioner of the Treasury’s Bureau of Public Debt claims to raise more than $2 trillion a year in order to “borrow the money needed to operate the federal government.” Obviously, the government cannot live within its tax revenue.

It’s not at all clear whether this borrowing includes the money to pay annual interest to those who hold treasuries, an amount that last year was $405.8 billion or more than a billion a day. If you believe the government, paying the interest due investors comes out of tax receipts, not borrowing. That’s where they list it as an item, like Social Security, that they once called “mandatory” expenses.

With our two largest creditors, China and Japan, coming “off the dollar” and investing elsewhere, it will become more and more difficult to raise this sort of monthly money. Holding more auctions, raising interest rates, increasing discounts, and crises in other markets can make treasuries more attractive to investors, but we cannot sustain this level of monthly borrowing forever.

The moment we are unable to borrow enough to pay off maturing treasuries we’ll be in real trouble. One default, even on the interest, and the market for American securities will collapse. Since treasuries can be cashed in at any time, we will then have a run on the Treasury.

Of course, the alternative is to take money from the annual budget or tax receipts. This would put an undue burden on a government already incapable of living within its means and running huge budget deficits.

We could also grovel before our creditors asking them for more time, lower rates, or some sort of manageable repayment schedule. Most if them would probably go along with some sort of arrangement only because no one wants to lose money.

Once known as “the safest investment in the world” because it was backed by the honesty, integrity, and pocketbook of every taxpaying citizen in America will never again enjoy that reputation because that same citizenry allowed their elected representatives to operate without fiscal responsibility.