Question: When you take out an ordinary student loan, it is usually the case that whoever holds that loan is given a guarantee by the U.S.

When you take out an ordinary student loan, it is usually the case that whoever holds that loan is given a guarantee by the U.S. government, meaning that the government will make up any payments you skip. This is just one example of the many loan guarantees made by the U.S. government. Such guarantees don’t show up in calculations of government spending or in official deficit figures. Why not? Should they show up?

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The reason they dont show up is that the US government uses cash accounting ie only actual cash i... View full answer

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