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March 28
US intergovernmental holdings increase in 2000s
National debt of the US, 2006-2024
According to this chart, the public-held debt stayed at about $5T from 2006 until late 2008; there was an increase, but percentagewise it was quite small. However, the total debt increased from about $8T to well over $9T, so it must have been in the intergovernmental holdings. Why would this accounting concept have seen such an increase? Nyttend (talk) 06:45, 28 March 2025 (UTC)[reply]
I assume you mean intragovernmental holdings rather than intergovernmental holdings. If so, that means the government borrows from its own trust funds to fund its spending. Stanleykswong (talk) 17:10, 28 March 2025 (UTC)[reply]
Agencies such as the Social Security Administration, veterans' pension funds, etc., need to hold very large amounts of very secure financial instruments. This is due to the need to protect the value (including from inflation, if possible) of their holdings against future obligations. The stock market is way too risky, and corporate bonds don't meet the requirement, either. So, they buy U.S. Government debt: T-Bills (and similar "agency paper). There is nothing that is considered a more secure / less risky store of value. This creates a situation where one part of the government "lends" money (buys T-Bills) to another part of the government (Congress, via the Treasury and Fed). DOR (ex-HK) (talk) 01:42, 29 March 2025 (UTC)[reply]
@Nyttend: I am not so sure about your premise. The chart is based on this official government dataset. According to that dataset, on Jan. 3, 2006 (the first business day of the year), the public held $4.72 trillion of the public debt and intragovernmental holdings were $3.44 trillion. On Sept. 12, 2008 (the last business day before the failure of Lehman Brothers), the public held $5.53 trillion and intragovernmental holdings were $4.16 trillion. On Dec. 31, 2008, the public held $6.37 trillion and intragovernmental holdings were $4.33 trillion. So the intragovernmental holdings were not really the dominant factor. John M Baker (talk) 15:41, 5 April 2025 (UTC)[reply]
I should have been clearer — I was talking about the spot immediately before the debt jumps in late 2008, which probably corresponds to 12 September or a little closer to mid-year. But I'm pretty sure that the chart shows the intragovernmental holdings increasing much more than the public holdings. Do you think the chart is wrong, or do you think I'm misinterpreting it? Nyttend (talk) 20:38, 5 April 2025 (UTC)[reply]
I think that either the chart is drawn with insufficient accuracy or precision, or you are misinterpreting it. In the 32-month period from January 2006 to September 2008, the public’s holdings increased by $0.84 trillion, or 18%, and intragovernmental holdings increased by $0.72 trillion, or 21%. So intragovernmental holdings increased proportionately somewhat more than public holdings, but not dramatically or surprisingly more. John M Baker (talk) 05:45, 6 April 2025 (UTC)[reply]
