National debt breakdown: Intragovernmental holdings

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Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 552
National debt breakdown: Intragovernmental holdings

I always wondered how the nat. debt was broken down as there is "debt held by the public" and "intragovernmental holdings".

Debt held by the public:

The Debt Held by the Public is all federal debt held by individuals, corporations, state or local governments, foreign governments, and other entities outside the United States Government. As of Oct 31 2009 DHBP was at $7.4 trillion.

   Debt held by public breakdown: Marketable securities: $1.8 trillion in bills. $3.8 trillion in notes. $689 billion in long bonds. $566 billion in TIPS. This is the market that determines the yields on US gov debt.

Intragovernmental holdings: (IGH)

These are government securities that are issued by one government agency and held by another. Such debts can include revolving accounts and trust funds. So when the gov borrows from Social Security or some other gov fund, the total gets added to the IGH section. As of Oct 31, 2009 IGH was at $4.4 trillion.

On the Treasury website, there is a breakdown of the IGH. The largest holder is the Government Account Series with the total outstanding being 4.83 trillion (almost 100%) of IGH.

Government Account Series big holders.

Federal Old Age and Survivors Insurance Trsut Fund: outstanding: $2.29 trillion.

Civil Service retirement and Disability Fund: $738 billion

Military Retirement Fund, Dept of Defense: $300 billion

Federal Hospital Insurance Trust Fund: outstanding $300 billion.

Federal Disability Insurance Trust Fund: $205 billion

There are many more here is the website:

http://www.treasurydirect.gov/govt/reports/pd/mspd/2009/opdm102009.pdf

Here is the most interesting piece i caught in the report. POSTAL SERVICE RETIREE HEALTH BENEFITS FUND is owed $35 billion!

If the post office personnel only knew that there health benefits were being borrowed against.

Conclusion:

The US gov owes roughly $4.5 trillion (37.5% of the national debt) to its own citizens, whether it be retirees, federal employee benefits and other funds. The remaining is owed to the market. The US Gov can choose to default on its obligations to its own employees and citizens in the most dire of circumstances. It is also important to note that the US defaulting on IGH obligations would not have a per se effect on the treasury bills, notes, bond markets as IGH are nonmarketable. I can see the US defaulting on IGH obligations before it ever defaults on its marketable securities.

Til next time

Bear

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: National debt breakdown: Intragovernmental holdings

Bear,

Thanks for taking the time to put this fine report together.  It is front page news that won't even make the back page.

bearmarkettrader wrote:

The US gov owes roughly $4.5 trillion (37.5% of the national debt) to its own citizens, whether it be retirees, federal employee benefits and other funds.

This is the part that makes no sense.  Benefit "trusts" were funded by the people via FICA withholding taxes and other "plans."  And our government, which is supposedly owned by "We the People, borrows our money?  How can we be creditors and debtors to the same money?  We have to pay back our own money - so effectively we are paying for whatever "benefits" might be left; twice.

Larry

P.S. - If ya don't mind me askin, how'd your law exam go?

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 552
Re: National debt breakdown: Intragovernmental holdings

I get the results on Friday at 6pm. Im basically in panic phase right now. I seriously hope i passed! Ill let everyone know on Fri night.

Yes the gov is really messed up if you ask me IGH "creditors" are going to get a nasty haircut in the next decade.

From 1995 IGH were a little above $1.5 trillion, in effect they have TRIPLED in the last 14 years.

Compare IGH with debt held by the public:

Debt held by public was roughly $3.5 trillion in 1995. Today is at $7.4 trillion. Its obvious that the rate which the gov is raiding public coffers is much quicker then the issuance of treasury securities.

Bear

livsez's picture
livsez
Status: Bronze Member (Offline)
Joined: Dec 1 2008
Posts: 68
Re: National debt breakdown: Intragovernmental holdings

Fingers Crossed G!

-Livio

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: National debt breakdown: Intragovernmental holdings

Bear you passed....no worriesSmile!

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