Summer 2014: Who Really Owns the U.S. National Debt?

Political Calculations / Townhall Columnist

 

U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2013 Through May 31, 2014. [PDF Document]. Share on Facebook 67 

Who are the major holders of debt issued by the U.S. federal government going into the summer of 2014? The answer is presented graphically below:




On the whole, there haven't been many changes since our previous edition. We see that the debt reported to be held by Belgium is still considerably inflated over historic levels, as this nation's banks would appear to have acted on behalf of Russian interests seeking to place their U.S. government-issued debt holdings in non-Russian financial institutions ahead of and in the months following Russia's actions to seize control of Crimea from Ukraine.

Tapering the Federal Reserve's Quantitative Easing Program Our special area of focus on this update of our irregular series on the ownership of the U.S. national debt looks at the role of the Federal Reserve's Quantitative Easing (QE) programs as the central bank of the U.S. has gone from holding a low of $478.7 billion in U.S. government-issued debt securities on 18 June 2008 up to an astounding $2,414.8 billion on 28 May 2014. As of that date, the Federal Reserve held a a combination of $2,370.7 billion in U.S. Treasury securities and $44.1 billion in debt securities issued by other federal government agencies.

The Federal Reserves holdings of these securities now accounts for 13.8% of all the total public debt outstanding for the U.S. federal government, which totals $17.490 trillion as of 31 May 2014. On 1 January 2014, the U.S. national debt stood at $17.352 trillion, of which the Federal Reserve held some $2.266 trillion, or 13.06%.

The Federal Reserve also holds some $1,648 billion in mortgage-backed securities, which are primarily issued by government-backed entities, including the Government National Mortgage Association (Ginnie Mae), which is owned by the U.S. federal government, and the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), which are nominally private institutions, but which have been operating under government conservatorship since 2008. Although these government-backed entities issue mortgage-backed securities, their role is to collect and bundle the mortgages of U.S. homeowners and firms for the money they've borrowed into pools, which are then securitized and traded on the open market - it is not money borrowed by the U.S. Treasury or federal government agencies.

The Federal Reserve began its most recent round of QE government-issued debt buying in the fourth quarter of 2012, which it began doing to keep the U.S. economy from falling into a full-fledged recession at the time. Beginning in January 2014, the Federal Reserve has been steadily reducing the amounts its QE purchases every six weeks, as it believes the risk of falling into recession has diminished.

Even though the Federal Reserve has been reducing its purchases of U.S. government-issued debt securities since the beginning of 2014, as of 28 May 2014, it has boosted its net holdings of the federal government's liabilities by $148.8 billion.

Meanwhile, the U.S. federal government borrowed an additional $138.1 billion from 1 January 2014 through 28 May 2014. Or rather, the Federal Reserve has acquired 107.7% of the net new debt that has been issued by the U.S. Treasury and other federal government agencies during the first five months of 2014.

That's possible because of two factors. First, with the bills for U.S. federal income taxes coming due on 15 April 2014, the federal government experiences a surge of tax revenue during this part of the year, which can be enough to allow it to run a short-term surplus, reducing its need to borrow money during this period of time.

Second, the Federal Reserve is displacing other entities that lend money to the U.S. government, who are seeing their share of debt issued by the U.S. government fall as the debt they hold matures. That allows the U.S. Treasury to roll over a portion of the existing national debt and borrow more money, in this case, from the Fed, which doesn't show up as a net increase in the overall size of the national debt.

And that is how the U.S. Federal Reserve can lend more money to the U.S. federal government than the U.S. government appears to have borrowed, even as the Fed is reducing the amount it lends to the government! Data Sources Federal Reserve Statistical Release. H.4.1. Factors Affecting Reserve Balances. Release Date: 5 July 2013. [Online Document]. Accessed 16 July 2014. U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 16 July 2014.

U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 16 July 2014.

U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2013 Through May 31, 2014. [PDF Document].

Newsmax                                                         Kerry: 'Overwhelming Evidence' Russian Missile Brought Down Malaysian Jet

Secretary of State John Kerry on Sunday said an "enormous amount of evidence" points to Russia providing antiaircraft missiles and training to pro-Russian rebels in Ukraine who shot down Malaysia Airlines Flight MH17.

Kerry also said U.S. intelligence agencies "saw the launch" of a missile from rebel-held territory just as the passenger plane vanished from radar.

Kerry's accusations came as as international horror deepened over the fate of the victims' remains. 

Kerry demanded that Moscow take responsibility for actions of pro-Russian rebels in eastern Ukraine whom Washington suspects of downing the jet with a missile, and expressed disgust at their "grotesque" mishandling of the bodies.

Television images of the rebel-held crash sites, where the remains of victims had lain decomposing in fields among their personal belongings, have turned initial shock and sorrow after Thursday's disaster into anger.

Emotions ran high in the Netherlands, the home country of about two-thirds of the 298 people who died in the Boeing 777. The Dutch foreign minister has said the nation is "furious" to hear bodies were being "dragged around," while relatives and church leaders demanded they be rapidly returned home.

But the departure of dozens of corpses loaded into refrigerated railway wagons was delayed on Sunday as Ukrainian officials and rebels traded blame over why the train had not yet left the war zone, and where or when international investigators would be able to check it.

The U.N. Security Council is scheduled to vote on Monday on a resolution that would condemn the downing of the plane and demands that those responsible be held accountable and that armed groups not compromise the integrity of the crash site.

In an apparent bid to compromise with Moscow, the wording of the resolution, drafted by Australia, was changed to characterize the incident as the "downing" of the flight, instead of "shooting down," according to the final draft obtained by Reuters. Diplomats said it was unclear if Russia would support the final version.

In Washington, Kerry criticized Russian President Vladimir Putin and threatened "additional steps" against Moscow.

"Drunken separatists have been piling bodies into trucks and removing them from the site," he said on NBC television on Sunday. "What's happening is really grotesque and it is contrary to everything President Putin and Russia said they would do."

Moscow denies any involvement in the disaster and has blamed the Ukrainian military. While stopping short of direct blame on Moscow, Kerry put forward the most detailed U.S. accusations so far, based on the latest U.S. intelligence assessments.

British Foreign Secretary Philip Hammond urged Moscow to ensure international investigators had access to the crash sites. "Russia risks becoming a pariah state if it does not behave properly," he told Sky television.

Australian Prime Minister Tony Abbott said he had spoken "overnight" to Putin for the first time about the disaster, amid mounting horror over the treatment of victims' remains. At least 27 Australian passengers were on the Malaysia Airlines flight.

Abbott said an Australian investigation team was in Kiev but had been unable to travel to the site. He said there had been some improvement with the Ukrainian government offering access.

"But there's still a hell of a long way to go before anyone could be satisfied with the way that site is being treated," Abbott said. "It's more like a garden cleanup than a forensic investigation. This is completely unacceptable."

 The Architect of Destruction

  By Maureen Scott

Barack Obama appears to be a tormented man filled with resentment, anger, and disdain for anyone of an opinion or view other than his. He acts in the most hateful, spiteful, malevolent, vindictive ways in order to manipulate and maintain power and control over others. Perhaps, because, as a child, he grew up harboring an abiding bitterness toward the U.S. that was instilled in him by his family and mentors…it seems to have never left him. It is not the color of his skin that is a problem in America. Rather it is the blackness that fills his soul and the hollowness in his heart where there should be abiding pride and love for this country. Think: Have we ever heard Obama speak lovingly of the U.S. or its people, with deep appreciation and genuine respect for our history, our customs, our sufferings and our blessings? Has he ever revealed that, like most patriotic Americans, he gets "goose bumps" when a band plays "The Star Spangled Banner," or sheds a tear when he hears a beautiful rendition of " America the Beautiful?" Does his heart burst with pride when millions of American flags wave on a National holiday or someone plays "taps" on a trumpet? Has he ever shared the admiration of the military, as we as lovers of those who keep us free, feel when soldiers march-by? It is doubtful because Obama did not grow up haring our experiences or our values. He did not sit at the knee of a Grandfather or Uncle who showed us his medals and told us about the bravery of his fellow troops as they tramped through foreign lands to keep us free. He didn't have grandparents who told stories of suffering and then coming to America, penniless, and the opportunities they had for building a business and life for their children. Away from this country as a young child, Obama didn't delight in being part of America and its greatness. He wasn't singing our patriotic songs in kindergarten, or standing on the roadside for a holiday parade and eating a hot dog, or lighting sparklers around a campfire on July 4th as fireworks exploded over head, or placing flags on the grave sites of fallen and beloved American heroes. Rather he was separated from all of these experiences and doesn't really understand us and what it means to be an American. He is void of the basic emotions that most feel regarding this country and insensitive to the instinctive pride we have in our national heritage. His opinions were formed by those who either envied us or wanted him to devalue the United States and the traditions and patriotism that unites us. He has never given a speech that is filled with calm, reassuring, complimentary, heartfelt statements about all the people in the U.S. Or one that inspires us to be better and grateful and proud that in a short time our country became a leader, and a protector of many. Quite the contrary, his speeches always degenerate into mocking, ridiculing tirades as he faults our achievements as well as any critics or opposition for the sake of a laugh, or to bolster his ego. He uses his Office to threaten and create fear while demeaning and degrading any American who opposes his policies and actions. A secure leader, who has noble self-esteem and not false confidence, refrains from showing such dread of critics and displaying a cocky, haughty attitude. Mostly, his time seems to be spent causing dissension, unrest, and anxiety among the people of America , rather than uniting us (even though he was presented to us as the "Great Uniter").    He creates chaos for the sake of keeping people separated, envious, aggrieved and ready to argue. Under his leadership Americans have been kept on edge, rather than in a state of comfort and security. He incites people to be aggressive toward, and disrespectful of, those of differing opinions. And through such behavior, Obama has lowered the standards for self-control and mature restraint to the level of street-fighting gangs, when he should be raising the bar for people to strive toward becoming more considerate, tolerant, self-disciplined, self-sustaining, and self-assured. Not a day goes by that he is not attempting to defy our laws, remove our rights, over-ride established procedures, install controversial appointees, enact divisive mandates, and assert a dictatorial form of power.   Never has there been a leader of this great land who used such tactics to harm and hurt the people and this country. · Never have we had a President who spoke with a caustic, evil tongue against the citizenry rather than present himself as a soothing, calming and trustworthy force. · Never, in this country, have we experienced how much stress one man can cause a nation of people - on a daily basis! Obama has promoted the degeneration of peace, civility, and quality of cooperation between us. He thrives on tearing us down, rather than building us up. He is the Architect of the decline of America, and the epitome of a Demagogue.

Cruz in Charge of the Conservative Movement

Erick Erickson / Townhall Columnist

 

In what appears to be the ultimate modern demonstration of "drinking the Kool-Aid," Republicans across the spectrum seem to have entered a pact in sticking together to defend, and even celebrate, campaign tactics predicated on gross voter fraud and manipulation of minority voters. In fact, given recent campaign finance disclosures, it seems clear some Senate Republican leaders helped pay for the attacks on their own base in Mississippi.

One senator, however, has broken the silence and is speaking out: Sen. Ted Cruz, who, ironically, holds an official position with the National Republican Senatorial Committee. Cruz has described the Mississippi fiasco as "appalling" and called for a "vigorous investigation" of possible criminal conduct in an interview with radio host Mark Levin.

Yet, in light of this principled call to ensure voting integrity, the Establishment remains undeterred, if not emboldened. The day after Sen. Cruz gave his interview, the NRSC hosted a reception to thank those who, according to the invitation, "generously supported and promoted Sen. Cochran's campaign during the primary."

One would think that Sen. Cruz would be joined by members such as Rand Paul, who, like Cruz, defeated a heavily-funded, NRSC-backed candidate in his own primary races.

Sen. Paul has distanced himself from the Republican voters seeking justice in this situation, commenting that, "I'm for more people voting, not less people voting," and adding -- for good measure -- "I think the people of Mississippi spoke, and I think Thad Cochran has done a lot of good things for Mississippi."

Similarly, Sen. Marco Rubio told the Wall Street Journal: "I think Thad Cochran found whatever tactics he could use to win his election and people could have an opinion about that, but at this point we should move forward and make sure we retain that seat."

Rand Paul is going out of his way to empower the establishment, throwing his star-power weight behind some of it's worst offenders. In perhaps the most public example, Rand Paul took the floor alongside Mitch McConnell in the minutes following Sen. Ted Cruz's 21-hour filibuster to deliver a colloquy designed to belittle the entire heroic effort.

He followed with an op-ed declaring the effort as misguided as Obamacare itself. His alliance with McConnell continued throughout that primary fight, with Rand Paul delivering his utmost support and enthusiasm for the defeat of a promising tea party candidate in his home state of Kentucky. More befuddling, Paul traveled to Maine to declare that he "wholeheartedly endorse(s) Sen. Collins for re-election" -- the same Susan Collins who maintains an impeccable record of establishment bidding in Washington.

Now, Paul's commitment to defending the status quo continues, as he lends active support to the re-election of Tennessee Sen. Lamar Alexander. Just months ago, all three of these Paul endorsees gave the American people a stiff arm by voting in favor of a "clean" debt ceiling increase. These are frontline battles in the fight to "Make D.C. Listen," yet Paul unabashedly lends each his support to those who stand consistently on the other side of the line.

Ted Cruz, on the other hand, has chosen to stand alone, again and again, against the establishment. From helping lead the charge to filibuster what the establishment said was inevitable gun control, to standing toe-to-toe with the administration in a fight to defund Obamacare, to challenging his own party bosses by demanding a 60-vote threshold to increase the debt ceiling without any spending reforms, Cruz takes bullets from his own party for daring to challenge the system.

The Republican Party will not change itself. No one is going to change the party with a magical speech delivered eloquently on the Senate floor. We will not win the argument in Washington. We must remake the party one hard-fought seat at a time, focusing intently on the principles we believe can turn this country around, rather than the men who feel entitled to maintain those seats. But Ted Cruz has laid the groundwork with his campaign to "Make D.C. Listen."

Gaza, Ukraine, Border Crises Have Roots In a Weakened America

Mark Davis / Townhall Columnist

 

 

When this week began, it was hard to imagine a story knocking our collapsing borders from the front of our minds. But in the span of a few hours Thursday, two stories made us hit the pause button on the mounting and proper indignation over the organized (and often secret) government dumping of illegals in our midst.

That is still a huge problem, and the one with the most direct effect on the average American citizen. But when TV screens began streaming images of the Ukraine wreckage of yet another Malaysian plane, and then the Israeli operation in Gaza, the border took a back seat.

That won’t last long. Ukraine and Gaza pack deep global importance, but if the Obama White House continues to hose us over the causes of the illegal deluge and the reasons for the secrecy surrounding it, the border crisis will force its way back to the attention-span forefront.

So if the coming days are to be a whirlwind ride from Gaza to Donetsk to the Rio Grande, this seems like a fitting moment to evaluate how we have arrived at all three crises— and surprise, it is not as simple as a finger pointed at Barack Obama.

While his stewardship of America’s decline is a prime cause of Mideast turmoil, Russian adventurism and a porous southern border, all three nightmares have histories that weave back through Presidents and Congresses of both parties.

Let’s begin with the Israeli response to endless provocation from Hamas terrorists in Gaza. Watch this operation closely, for this is what it looks like when a strong leader takes bold action to protect his nation, a sight we have not seen and will not see as long as Obama is in the White House.

But even George W. Bush, who kept us safe with a war taken to the enemy after 9/11, supported a ridiculous “two-state solution” that hastens to grant Palestinians a nation well before they show any aptitude for non-terrorist self-governance.

The moment the dust settled after the Six-Day War in 1967, the policy of the United States should have been the retention of the post-war status quo: Gaza is in Israel and not Egypt, the West Bank is in Israel and not Jordan, and the Golan Heights are in Israel and not Syria. This is what happens when wars are won.

The intervening years of bloodshed have been due in large part to America’s failure to remind the Palestinians that there are thousands of square miles they may inhabit in the vast lands surrounding the sliver that is Israel, and that if they do choose to remain in Israel, they will enjoy democracy and stability unthinkable in the Islamic neighbor nations.

Instead, we have pandered to terrorist leaders from Yasser Arafat forward, chiding Israel that it should show “restraint” while under constant attack, forwarding an obscene moral equivalency between our Israeli allies and the surrounding nations filled with enemies seeking its destruction.

There is no such nation as Palestine. Gaza is in Israel and while we’re at it, so is the West Bank. One cannot “occupy” one’s own nation. There is a thoroughly proper Palestinian homeland called Jordan, but if we simply have to carve out more, such prospects should not be breathed until the Palestinian leadership has displayed years— and I don’t mean one or two— of worthy behavior.

If this had been U.S. policy for the last five decades, Gaza would not have degenerated into the terrorist hornets’ nest it has become.

Similarly, there has been a price for our failure to treat Vladimir Putin as the murderous thug that he is. Americans always want enemy leaders to be less horrible than they are, so we concoct profiles of them that ignore the tough choices of speaking truth to evil. Modern Russia is not the Soviet Union, but Putin is no Thomas Jefferson.

The Obama years have been particularly energizing to his authoritarian instincts, steeling him with the knowledge that he could pluck Crimea like a grape and we would do nothing. He has not yet tested us by bringing Ukraine back into the Russian fold, but it looks like his bloody henchmen have downed another aircraft in their zeal to punish Ukraine for daring to cleave to liberty.

The United States should make clear that we are going to arm the Ukrainians to the teeth while training their forces. There is no limit to the blood Putin will attempt to draw in thirty additional months of an Obama presidency that may talk tough on occasion but shows little to suggest any real resolve behind the rhetoric.

To return to our own country, Obama joins a list of Presidents stretching back to Reagan and arguably farther, who underdelivered on the necessity of a border that does what borders are supposed to do.

Obama demands that Israel immediately stop the war when it reaches 1,000 dead in Gaza!

Bare Naked Islam

“A senior source in the American Administration says that if the number of  dead among the Palestinians in Gaza reaches 1,000 President Obama will  demand that Israel immediately ceases fire- in a conversation with our  correspondent Oren Nahari.” Israel tells Obama:

IMRA (h/t Linda R)  Israel Radio News bulletin 14:00 19 July 2014 Dr. Aaron Lerner – IMRA: this arbitrary figure is another illustration that when the  Obama Administration says “it has Israel’s back” it means it has a knife in Israel’s back. The issue is not how many human shields Hamas sacrifices in the Gaza Strip. The issue is addressing the festering cancerous security challenge. Stopping this operation with the tunnels intact, for example, means leaving open Israel’s population to the threat of  huge bloody terror attacks at any moment.

See the video here:  http://www.barenakedislam.com/2014/07/19/obama-demands-that-israel-immediately-stop-the-war-when-it-reaches-1000-dead-in-gaza

Newsmax

US Building Case Tying Separatists to Plane Crash

 

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The United States is building a case linking pro-Russian separatists to the shocking downing of a passenger jet in Ukraine.

A somber President Barack Obama declared the deaths of those on board, including at least one American, an "outrage of unspeakable proportions."

Obama said the U.S. believes the Malaysia Airlines plane was felled by a surface-to-air missile launched from an area near the Ukraine-Russia border that is controlled by Kremlin-backed separatists. Even as he cautioned that the exact circumstances were still being determined, the president turned his sights on Russia, saying the insurgents would not be capable of carrying out such an attack without Moscow's support.

"We know that they are heavily armed and they are trained, and we know that that's not an accident," Obama said. "That is happening because of Russian support."

The president spoke shortly after Samantha Power, the U.S. ambassador to the United Nations, outlined preliminary evidence against Russia and the separatists during an emergency meeting of the U.N. Security Council. Power said separatists were spotted Thursday with an SA-11 anti-aircraft missile at a location close to the site where the plane came down and that they had boasted on social media sites about shooting down a plane, then later deleted those posts.

Power joined Obama in calling for an immediate international investigation, and she warned that the separatists and those supporting them would have "good reason to cover up evidence of their crime."

The U.S. has called for evidence from the crash site to remain in Ukraine until investigators determine who is responsible.

The American killed in the incident was identified as Quinn Lucas Schansman. Officials said they were still working to confirm whether any other U.S. citizens were on board the plane.

For Obama, the downed plane adds new complexity to U.S. efforts to quell the months-long conflict between Russia and Ukraine. Increasingly stringent economic sanctions imposed by the U.S. and Europe, including a new round of penalties announced a day before the plane was shot down, have done little to change Russian President Vladimir Putin's approach.

Obama warned Russia anew on Friday that the U.S. has the capacity to increase the economic pain, but he outlined no specific potential actions. He did say he saw no U.S. military role in the conflict that has stemmed in part from Russia's annexation of the Crimean Peninsula from Ukraine.

All 298 people aboard the Malaysian plane were killed in Thursday's incident. The victims included vacationers, students and a large contingent of scientists. The passengers came from a dozen countries, spreading the impact of the Ukraine crisis around the globe.

"This certainly will be a wake-up call for Europe and the world that there are consequences to an escalating conflict in eastern Ukraine — that it is not going to be localized, it is not going to be contained," Obama said.

The president has spoken with several world leaders since the crash, including Ukrainian President Petro Poroshenko. On Friday, he called British Prime Minister David Cameron and German Chancellor Angela Merkel to discuss possible responses to the crisis. He also spoke with Prime Minister Tony Abbott of Australia, whose country lost 27 citizens in the crash.

Obama learned of the plane crash during a phone call Thursday with Putin. On Friday, the president stopped short of blaming Putin for the downing of the plane, but he said the Russian leader could bring the broader conflict to an end.

"He has the most control over that situation, and so far at least he has not exercised it," the president said.

A U.S. official said all available evidence, including satellite imagery, pointed to the plane being shot down with an SA-11 anti-aircraft missile fired by pro-Russian separatist forces. The official said the U.S. detected three separate events associated with the shootdown: the launching of the missile from the Ukraine side of the border, the missile's impact with the plane and the plane slamming into the ground.

That official was not authorized to discuss U.S. intelligence matters publicly by name and commented only on condition of anonymity.

Power, during her remarks at the United Nations, said Ukrainian forces as well as the separatists have SA-11 systems in their inventory. However, she said the U.S. was not aware of those systems being in the area of the shooting, and she noted that Ukrainian air defenses have not fired any missiles during the dispute with Russia.

The State Department said the FBI and National Transportation Security Board were each sending at least one agent to Ukraine, and perhaps more later, to assist with the crash investigation.

A command center has been set up at the State Department, where officials from agencies participating in the delegation gathered Friday morning for a briefing from the CIA on the political and military situation.