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The primary market in Treasury securities, where new debt instruments are sold to fund
government operations, is also relatively unregulated. A principal channel for the distribution of
new Treasuries is a group of firms called primary dealers, who purchase securities at auction for
their own accounts and for their customers. The primary dealers are 19 commercial and
investment banks, both foreign and domestic. The primary dealer list is maintained by the Federal Reserve Bank of New York, which conducts auctions for the Treasury, but its relationship to the dealers is commercial, rather than regulatory. The New York Fed does, however, collect certain data about primary dealers’ transactions in government securities.
a quote from the introduction to the 2009 Social Security trustees report...
"Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public."
In other words, the trust fund is of no economic value.
Our operations are funded by an annual appropriation for administering the public debt and permanent-indefinite appropriations for Federal Reserve Bank services and interest on the public debt. The services that we provide to our franchise customers are self-funded.
CBO- Federal Debt and Interest Cost
The government pays and collects interest in various
ways; its net interest outlays are equal to interest paid
minus interest received. Net interest outlays are dominated
by the interest paid to holders of the debt that the
Department of the Treasury issues to the public. The
Treasury also issues debt to trust funds and other federal
government accounts, but the payment of interest to
those accounts is an intragovernmental transaction that
has no effect on net interest and no effect on the budget
deficit. Other federal accounts also pay and receive
interest for a variety of reasons.
The key findings are:
• As of April this year, US Treasury bonds owned overseas accounted for $4.7tn of the national debt - up 8% on last year. That's not everything - the US now owes over $14tn.
• China is the biggest owner of US Trasury bonds - over $1.14tn by September this year - down -0.3% on last year
• Bonds bought in the UK (mainly private investors and pension funds) are third on the list at $421.6bn - up 120.7%, which is the biggest increase
• Russia saw the biggest decrease, down 45.3% since last year to $94.6bn
It reflects a US national debt which has grown starkly, from $7.8tn in 2005 to busting through the US debt ceiling $14.294tn earlier this year - according to these day by day figures.
Originally posted by jlm912
reply to post by queenannie38
Yeah that's the summary of accounts in the Fedinvest program- makes up a large portion of the intragovernmental holdings, but there are separate programs for the trust funds and what not.
From what I understand, all of the intragovernmental holdings are non-marketable (different "special-issue" securities not available outside of government agencies)
Unfortunately, it doesn't quite help me in the goal of tracing the payments to their source(s), but it is an interesting note to keep on hand, because I'd like to eventually get deeper into the Federal Reserve's role in all this securities business, especially on the subject of quantitative easing and their purchase of secondary marketable securities held by the public. If they are in fact a "government" entity, then 1) why are they allowed to purchase marketable securities, and 2) why are they forbidden by law to buy securities directly from the Treasury? Or if the latter's even true, because I can only remember reading that in one source, which was a news article I believe, but I'll have to backtrack to find it and cover all of that collectively in a future post.edit on 18-8-2012 by jlm912 because: (no reason given)