By Mark Skidmore and Catherine Austin Fitts (with Rob Kirby and David Pare)
In May 2020, we provided an update (Skidmore and Fitts, 2020,) regarding the $21 trillion in unsupported journal voucher adjustments documented in federal government reports created by the Office of the Inspector General. In that update, we discussed new information obtained via a Freedom of Information Act (FOIA) request in which we received documentation regarding 170 unsupported adjustments that tallied to $2.1 trillion. We also presented new information regarding a very high rate of redemption and reissuance of federal government debt instruments. In 2019, total government debt was about $22 trillion, but bond redemptions and reissuance were about $95 trillion (United States Department of Treasury, 2020a). Further, redemptions and reissuance had grown at a much faster pace than debt over the 2001-2019 period and appeared to be much larger than what seemed to be required to support the existing debt outstanding. This information prompted us to ask whether high redemptions and reissuance were indicative to more debt outstanding than is officially reported. In June 2020, Mark Skidmore gave an interview on USA Watchdog in which he discussed this new information and invited others to offer ideas and suggestions. Fortunately, several suggestions emerged, one of which was to examine internally held debt. Recall that the federal government issues General Account Series securities for funds such as the Federal Old-Age and Survivors Fund, which are held internally within the government. Currently, internal debt outstanding is more than $6 trillion. In this update, we offer new analyses regarding the nature of the large redemptions and reissuance being used to support internally held debt. Specifically, a portion of the internally held debt is composed of securities with one-day maturities. One-day securities require turnover every business day, thus generating very large redemptions and reissuance over the course of a year.
Read the update here.