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02/11/12
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February 06, 2006 In the last week, several good hearts have broadcast the news that the Bush administration has broken through the statutory debt limit of $8.184 trillion, even that it’s now operating in “technical default,” and that the nation is literally in a world of trouble because of this. It just isn’t true. Not yet, anyway. Not Subject to the Debt Limit The U.S. Treasury currently lists $57.5 billion “not subject to the debt limit.” The Daily Treasury Report, Table III-C on January 27, 2006, expresses this as the debt subject to limit currently standing at $8.126 trillion, well short of the $8.190 reported as “total debt” outstanding – what leads others to believe we’ve gone over the limit. Although the Treasury attributes this “not subject to…” category to several obscure accounts like the “unamortized discount” and the “Federal financing bank,” I am firmly convinced that the real culprit is the government's Thrift Savings Plan for federal employees. Let me explain. Real Trust Funds Unlike all of the fictitious trust funds in the “Intragovernmental Holdings” forty-two percent portion of the national debt, the government does currently manage eighteen real trust funds, dominated by the Thrift Savings Fund. All total, these eighteen real trusts hold $68 billion in real money or liquid assets – and the Thrift Savings Plan is more than 93 percent of that, or currently $63.5 billion. The government doesn’t want you to know this, and they don’t want to list these trusts with the phony ones that hold nothing but “special” nonmarketable bonds. So they list them with other real debt under “Debt Held by the Public” or what ought to be called Investor Debt – debt that was incurred under legitimate contract instead of substituting for stolen money. Then it becomes debt “not subject to the debt limit” because it’s legitimate investment and they don't know where else to hide it. The $68 billion in these real trust funds is more than the $57.5 billion “not subject to the debt limit,” but the Thrift Savings Plan allows federal employees many choices of where they want their contributions and our “matching” tax money invested. One of these choices is legitimate treasuries of the kind we issue to China, Japan, and other nations still willing to loan us money. You can’t count the same investments or debt twice, and these are already listed along with "investments" from China, so the difference is probably the amount federal people have invested in treasuries. And the rest, the $57.5 billion balance, is probably the “unamortized discount” of these 18 trusts coupled with the investment money still being played with by the “Federal Finance bank.” There’s more In 2003, the federal government hit the national debt ceiling in February and was able to hold at twenty-five million under that amount until late May or just before half of the “interest” had to be paid to the Social Security and Medicare trust funds, a dumping action that nevertheless raises the national debt. In government parlance, $25 million is a pittance so you have to ask how they were able to stall for so long. John Snow's people could do this again. If they do, they will continue holding “auctions” to borrow from foreign countries and investors. Billions a day in securities are maturing all of the time. Mr. Van Zeff of the Treasury’s Bureau of Public Debt, a man few have even heard of, will just have to work a little harder and faster to make certain the necessary money has been borrowed quickly after the checks are in the mail. It's just an extension of the "float" action they're always doing to hold the debt level. Once we do come close to the debt ceiling, the Treasury can also “cash-in” the liquid assets of the Thrift Savings Plan, extending the deadline another month or so and putting off the stall. This is when you hear Congress critters screaming that “he’s using our money” even though it will be returned once they raise the limit. It's often what drives them to immediate legislation. In Summary With five years in office, this will be the fourth time the Bush administration has raised the debt ceiling. When George W. Bush took office, the national debt limit stood at $5.950 trillion, a limit that had been set on August 5, 1997 : * On June
28, 2002 , the debt limit was raised to $6.400 trillion. Since taking office on January 20, 2001 , and Alan Greenspan immediately whisked him away to a private meeting, Bush has increased the national debt $2.5 trillion, a record for any President. It took Clinton eight years to add that much debt, but add it he did. Give George a chance. He’ll beat that record by miles. And you cannot write off all this borrowing to the illegal invasion and occupation of Iraq. This time, the hurricanes that hit New Orleans and the Gulf Coast will be a major part of the excuse. Can you believe it? The man still claims he's "on track" to cutting the deficit in half. Send a message to your elected representatives. Click here to start. Be sure to send a copy to Ed Henry.
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Questions In The Age Of Distraction Cult differences In Truth & Financial Responsibility The Real Deficit - Without Crooking The Books The Job Market - Is It Really Getting Better? Going, Going, Gone - The Saga of Financial Responsibility Special Bonds In "Special" Trusts Too Late For Corrective Action Going Whole Hog In Just Four Days Snow Thinks Citizens Are Stupid Shackled, But Plunging Ahead Anyway Complete Archives for Ed Henry | ||||||||||||||
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