The role of the US Treasury is a long established one in the American government. Congress created the US Treasury in 1789. Part of the executive branch, the Treasury is responsible for most things pertaining to money in the United States, including minting new money, collecting taxes and managing the public debt, according to the Treasury website. The policies of the Treasury Department also serve to support and promote economic growth within the country.
Minting New Money and Collecting Taxes
The US Treasury is responsible for minting all new money in the United States. This includes both coins and paper currency. The production of paper currency is handled through their agency called the Bureau of Engraving and Printing. The Bureau creates paper money for the main bank of the US, which is called the Federal Reserve. The Treasury Department is also responsible for the minting of new coins, but that is done through another of their agencies, the United States Mint.
The Treasury Department also has an important role as a tax collector. They collect all taxes in the United States through their agency the Internal Revenue Service. Treasury is responsible for helping to interpret the Internal Revenue Code. It is also their job to enforce tax laws and investigate possible tax evasion.
A country is like a larger version of a family or a business. Making money is only part of Treasury’s role. They also must manage debt. Just like a family or business sets up a budget, so does the country. When a government spends more than it brings in via duties and taxes, it runs a deficit and needs to borrow money. The Treasury is responsible for managing the public debt of the United States, which has grown to be quite large over the years. It’s the Treasury’s job to calculate the national debt every day.
Encouraging Economic Growth
One of the most important elements of the role of the US Treasury is their effort to ensure a healthy national economy, according to Investopedia. The department advises the President on economic policy to try to prevent economic crises and to promote and maintain a solid standard of living. They work with other institutions within the government, particularly the Federal Reserve, to ensure as much economic stability as possible. Since the Federal Reserve is the bank of the U.S., they work with the Treasury Department when the country needs to borrow money. The Federal Reserve can issue and sell Treasury securities like bonds to help raise money that the country needs. When the country does move into difficult economic times, like a recession, the Treasury Department and the Federal Reserve work together to find ways to stimulate the economy again. They do so by issuing tax rebates or reducing interest rates so consumers will have more money to spend.
Related Resource: Director of Taxation
The US Treasury is a government institution with a long history and many years of experience. The role of the department is highly complex and connected to many other government institutions. Whether minting money, collecting taxes, managing debt or helping to create and carry out policies to keep the economy robust and growing, the role of the US Treasury is a very important one.