WE'RE NOT THERE YET
By: Ed Henry
Its nice to see so many people interested in the national debt,
but it also seems that some of them are taking baby steps into an arena where its
easy to get lost or misdirected.
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
its now operating in technical default, and that the nation is literally
in a world of trouble because of this. It just isnt 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
weve gone over the limit.
Although the Treasury attributes this not subject 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 doesnt want you to know this, and they dont 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 its 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 cant 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
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
Treasurys 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
hes using our money even though it will be returned once they raise the
limit. It's often what drives them to immediate legislation.
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.
- On May 27, 2003 , the debt limit was raised to $7.384 trillion.
- On November 19, 2004 , the debt limit was raised to its current $8.184 trillion.
- Secretary of the Treasury, John Snow, is now pleading for another immediate increase.
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. Hell 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.
Ed Henry is the founder of TUFF, the
Taxpayers Union, and a regular columnist for Ether Zone.
"Published originally at
EtherZone.com : republication allowed with this notice and hyperlink intact."
Ed Henry can be reached at email@example.com
Ed's FREE pamphlet-"To The Moon, Alice" the national
debt, your Social Security, and the Pay-It-Again Sam scam.
We also invite you to visit his website at www.Uncle-Scam.com
Published in the February 2, 2006 issue of Ether Zone.
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