Federal Agencies issue their own "treasuries"?
Post #709
For a long time, I was under the impression that the U.S. Treasury was the only institution that could issue U.S. government bonds.
The structure of the Executive Branch breaks down into federal departments and then further down into federal agencies. There are over a dozen federal departments, but there are literally hundreds of federal agencies. Agencies are the smallest “clean break” of different aspects of the federal government.
I accidentally discovered that the Federal Reserve holds securities issued by federal agencies (those smallest divisions of the federal government). If each separate federal agency gets to issue its very own government bonds, then there could be hundreds of ledgers required in order to account for the true total of federal debt.
The only instance I found was from the Housing Crisis, where Fannie and Freddie and FHL banks were somehow able to issue their very own government bonds and to sell them directly to the Fed:
With hundreds of federal agencies, let’s hope that they don’t all start to issue their very own government bonds — as part of some convoluted “shell game” where bureaucrats play “hide the true debt from the public.”
Importance
Executive Order (EO) 13526 of December 29, 2009 authorizes federal “dark money” — i.e., federal spending which cannot be audited — for supposedly some kind of a brand-new reason of national security. While this directly violates Article I, Section 9 of the U.S. Constitution (emphasis added):
No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
… it does not seem to have been overruled yet, but has instead been confirmed by a federal accounting board ruling, FASAB 56. The ability for federal agencies to splinter off and to create their very own independent debt schemes could make it nearly impossible to track the true fiscal danger of a wanton abuse of power.
Reference
[hundreds of federal agencies] — How Many Federal Agencies Exist? We Can't Drain The Swamp Until We Know. Clyde Wayne Crews Jr. Forbes Magazine online. https://www.forbes.com/sites/waynecrews/2017/07/05/how-many-federal-agencies-exist-we-cant-drain-the-swamp-until-we-know
In a 2015 Senate Judiciary Committee hearing, Chairman Chuck Grassley (R-IA) noted: “[T]he Federal Register indicates there are over 430 departments, agencies, and sub-agencies in the federal government.”