The U.S. Debt–Intragovernmental Holdings: When You Owe Yourself Does It Still Count?


Fast Fact #2 - Historically, the debt has risen because of major wars and financial depressions. But now, over a third of the debt is associated with something called intragovernmental holdings.  (Learn more in Chapter 2.)

Unlike our first 120 years of history, the national debt no longer increases solely from military conflicts or large-scale financial calamities.  Starting in the early 1900’s, views about debt and the role of the federal government began to change.  One result of these changes was the introduction of a new kind of debt.  Figure 1 delineates between the 2 major types of debt, defined as:

• Debt Held By the Public – all federal debt held by individuals, corporations, state or local governments, foreign governments, Government Account Series Deposit Funds, and other entities outside the United States Government less Federal Financing Bank (FFB) securities.  To clarify, this debt is the result of the Treasury Department borrowing money to finance operations by selling securities to the public.

• Intragovernmental Holdings – Government Account Series securities held by Government trust funds, revolving funds, and special funds; and Federal Financing Bank securities.  A small amount of marketable securities are held by government accounts.  This debt, held by government entities, primarily consists of fund balances.

Figure 1 U.S. Debt (Billions), with Intragovernmental Holdings as Percent of Total, 1953-2015, Source: U.S. Treasury Bureau of Public Debt

Intragovernmental holdings accounted for 15% of the total debt in 1953, rising to 44% in 2007.  While this percentage value drops after 2007, it is only because the debt amount held by the public rises so dramatically.  Two thirds of intragovernmental holdings are associated with what the government calls the Social Security and Medicare “trust funds”.  And herein is an area of considerable confusion among Americans.  How can programs like Social Security and Medicare drive up the national debt?  After all, Americans pay into these systems via payroll taxes and the government invests this money for future beneficiaries.  There should be a corresponding set of assets in these trust funds to offset the amount outstanding – right?

Previous blog posts in the series:
Understanding U.S. Debt
U.S. Dept - Inflation and the Economy 

In my next post, I’ll explain in more detail how these trust funds operate.  In the meantime, visit to learn more.


The views expressed are those of the author and not necessarily The University of Texas at Austin.

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