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Ownership of the Federal Debt
[Federal Debt Table, 1940-2000]
Total Federal Debt $4.9 Trillion, September 1995
* The federal government owns part of the debt itself, either in trust funds or by the Federal Reserve. Medicare and Social Security are financed through trust funds, receiving funding directly from payroll taxes designed to support them. When these trust funds run a surplus, the federal government is required to invest the money in federal securities, this insuring that the federal government will own much of the debt itself. The debt held by the Federal Reserve is in the form of a large number of Treasury Securities. The Fed buys and sells its securities in order to increase or decrease the amount of money in circulation so as to affect the prevailing interest rate.** This includes savings and loans, credit unions, non-profits, mutual savings banks, corporate pension funds, and dealers and brokers
[source: Treasury Bulletin of September 1995, put out by the Treasury Department]
