Clarity on the National Debt

Posted by Tina

Well, cr*#! This revelation’s” certainly a jaw dropper!

Its mild-mannered name is “agency debt.” It’s the debt of federal agencies and government-sponsored enterprises (GSEs) that is not included in the National Debt. In other words, when you go to the U.S. Treasury’s Debt to the Penny page, and find that on September 27, 2015 the debt was $18,151,073,031,331.50 you wouldn’t find any agency debt in that number, nor in the $13,140,301,918,135.70 of Debt Held by the Public.

Who cares, anyway? Well, you might care if you went over to the Federal Reserve Board’s site and found that agency debt is tucked away in its Financial Accounts of the United States report in Table L.211 and found that that agency debt at the end of 2014 was about $6,920,000,000,000.

What is agency debt anyway? The Federal Reserve provides a helpful footnote to Table L.211:

Agency- and GSE-backed securities include: issues of federal budget agencies (line 2) such as those for the TVA; issues of government sponsored enterprises (line 3) such as Fannie Mae and FHLB; and agency- and GSE-backed mortgage pool securities issued by GNMA, Fannie Mae, Freddie Mac, and the Farmers Home Administration (line 4). Only the budget agency issues are considered officially to be part of the total debt of the federal government, which is shown in table L.106, line 20.

In other words, agency debt is the debt issued by Fannie Mae, Freddie Mac & Co. It is the helium gas cylinder that inflated the Great Real Estate Bubble.

This near $7 Trillion is even more troubling since it’s been reported that this administration has continued to push for the lending practices that led up to the bursting housing bubble.

Hold on to your hats…we’re in for difficult days ahead.

This entry was posted in Uncategorized. Bookmark the permalink.

7 Responses to Clarity on the National Debt

  1. Pie Guevara says:

    Am I the only person besides Tina who finds this policy disturbing and dangerous? Tina is on top of it again, yet it appears no one is listening. No, Chris, that was not an invitation for you blow smoke.

  2. Dewey says:

    The Obama Admin does protect the bankers too much. That said The republicans are 100% for more deregulation and would block any sensible bills. The bankers own the majority of these politicians. They should not be able to create these monopolies.

    The Fed needs to be audited and brought under control. Or abolished. The Fed is not a gov bank, it is a privately owned bank. It is rigged against us for bankers profit. Rob a bank you go to jail. Bankers rip off the people they get a fine and their stock and profits go up.

    THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY.

    Article 1, Section 8 of the Constitution states that Congress shall have the power to coin (create) money and regulate the value thereof. Today however, the FED, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value.

    Let’s talk about this scam.

    Remember JFK issued silver certs again and after they killed him they reversed that very quickly. The only thing the Paul’s have been correct about is the scam of the Federal Reserve.

  3. Tina says:

    Dewey if you’re going to do research don’t forget to read the entire paragraph…or sentence…before deciding what it says. Wikipedia:

    The order allowed the Secretary to issue silver certificates, if any were needed, during the transition period under President Kennedy’s plan to eliminate Silver Certificates and use Federal Reserve Notes. …

    On November 28, 1961, President Kennedy halted sales of silver by the Treasury Department. Increasing demand for silver as an industrial metal had led to an increase in the market price of silver above the United States government’s fixed price. This led to a decline in the government’s excess silver reserves by over 80% during 1961. Kennedy also called upon Congress to phase out silver certificates in favor of Federal Reserve notes which, according to the Associated Press at that time, were still backed by gold.

  4. Pie Guevara says:

    Jaw drop! Dewey actually knows The Federal Reserve Bank is a private enterprise!

    Who owns the Federal Reserve?

    The Federal Reserve System fulfills its public mission as an independent entity within government. It is not “owned” by anyone and is not a private, profit-making institution.

    As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

    However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve’s activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as “independent within the government” rather than “independent of government.”

    The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation’s central banking system, are organized similarly to private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

    http://www.federalreserve.gov/faqs/about_14986.htm

  5. Pie Guevara says:

    Umm, my ad. I was being facetious in the above about poor Dewey, “Jaw drop! Dewey actually knows The Federal Reserve Bank is a private enterprise” Dewey does not understand a damn thing. He is the result of an “education” provided by left wing liberals. Sad but true.

  6. Tina says:

    The Federal Reserve is not structured in exactly the same way as Fannie Mae but both represent a measure of government intrusion (control) into private sector business. There’s much debate over whether that is a good thing or a bad thing but one things for sure, the fascism that Dewey complains about is here and most often a result of democrat ideas and decisions.

    Fascism (for kids): a political system headed by a dictator in which the government controls business and labor and opposition is not permitted

    In our case government and unions have worked together against the private sector not only in business but in our educational system as well.

    The Federal Reserve, it turns out, is a money making machine for the government:

    The U.S. Government receives all the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury

    And Fannie Mae?

    On September 7, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA. The action was “one of the most sweeping government interventions in private financial markets in decades”.[41][42][43] Lockhart also dismissed the firms’ chief executive officers and boards of directors, and caused the issuance to the Treasury new senior preferred stock and common stock warrants amounting to 79.9% of each GSE. The value of the common stock and preferred stock to pre-conservatorship holders was greatly diminished by the suspension of future dividends on previously outstanding stock, in the effort to maintain the value of company debt and of mortgage-backed securities. FHFA stated that there are no plans to liquidate the company.[41][42][43][44][45][46][47]

    The authority of the U.S. Treasury to advance funds for the purpose of stabilizing Fannie Mae, or Freddie Mac is limited only by the amount of debt that the entire federal government is permitted by law to commit to. The July 30, 2008 law enabling expanded regulatory authority over Fannie Mae and Freddie Mac increased the national debt ceiling US$800 billion, to a total of US$10.7 Trillion in anticipation of the potential need for the Treasury to have the flexibility to support the federal home loan banks.

    On June 16, 2010, Fannie Mae and Freddie Mac announced their stocks would be delisted from the NYSE. The Federal Housing Finance Agency directed the delisting after Fannie’s stock traded below $1 a share for over 30 days. Since then the stocks have continued to trade on the Over-the-Counter Bulletin Board.

    In May 2013, Fannie Mae announced that it is going to pay a dividend of $59.4 billion to the United States Treasury

    2014 – $134.5 billion dividend paid …

    …On May 8, 2013, Representatives Scott Garrett introduced the Budget and Accounting Transparency Act of 2014 (H.R. 1872; 113th Congress) into the United States House of Representatives during the 113th United States Congress. The bill, if it were passed, would modify the budgetary treatment of federal credit programs, such as Fannie Mae and Freddie Mac.[81] The bill would require that the cost of direct loans or loan guarantees be recognized in the federal budget on a fair-value basis using guidelines set forth by the Financial Accounting Standards Board.

    Washington is one big fat redistribution center…to itself.

    Big government does not work and should be limited at the federal level in particular.

    Regulations and laws should be precise, easy to understand, and limited in scope.

    Our financial and employment problems and our weak economy can all be attributed to massive government intrusion. We don;t have to be worried about moving toward European style socialism…we’re there!

    How do you like the misery?

    Dewey is confused.

Leave a Reply

Your email address will not be published.