The U.S. debt is $19.9 trillion. Most headlines focus on how much the United States owes China, which is one of the largest foreign owners. What many people don’t know is that the Social Security Trust Fund, aka your retirement money, owns most of the national debt. How does that work, and what does it mean?The U.S. Treasury manages the U.S. debt through its Bureau of the Public Debt. The debt falls into two broad categories: Intragovernmental Holdings and Debt Held by the Public. (Source: "Debt to the Penny," U.S. Treasury, January 26, 2017.)This is the federal debt owed to 230 other federal agencies. It totals $5.554 trillion, almost 30 percent of the debt. Why would the government owe money to itself? Some agencies, like the Social Security Trust Fund, take in more revenue from taxes than they need. Rather than stick this cash under a giant mattress, they buy U.S. Treasurys with it.By owning Treasuries, they transfer their excess cash to the general fund, where it is spent.
Of course, one day they will redeem their Treasury notes for cash. The Federal government will either need to raise taxes or issue more debt, to give the agencies the money they will need. Which agencies own the most Treasuries? Social Security, by a long shot. Here's the detailed breakdown (as of December 31, 2016). Debt Held by the Public. This is the rest of the national debt, totaling $14.403 trillion. Foreign governments and investors hold nearly half of the nation's public debt. One-fourth is held by other governmental entities. These include the Federal Reserve, as well as state and local governments. Fifteen percent is held by mutual funds, private pension funds, savings bonds or individual Treasury notes. The remaining 10 percent is owned by businesses, like banks and insurance companies, and an assortment of trusts, companies, and investors. This debt is not only in Treasury bills, notes and bonds but also Treasury Inflation Protected Securities and special State and Local Government Series securities.
As you can see, if you add up the debt held by Social Security and all the retirement and pension funds, nearly half of the U.S. Treasury debt is held in trust for your retirement. If the United States defaults on its debt, foreign investors would be angry, but current and future retirees would be hurt the most.As the nation's central bank, the Federal Reserve is in charge of the country's credit. It doesn't have a financial reason to own Treasury notes. So why did it double its holdings between 2007 and 2014?That's when it ramped up its open market operations, such as purchases of Treasuries. This quantitative easing stimulated the economy by keeping interest rates low. It helped us escape the grips of the recession.Is the Fed simply monetizing the debt? Yes, that's one of the effects. The Fed purchases Treasurys from its member banks, using credit it created out of thin air. It has the same effect as printing money. By keeping interest rates low, the Fed helps the government avoid the high-interest rate penalty it would usually incur for excessive debt.
The Fed ended quantitative easing in October 2014. As a result, interest rates on the benchmark 10-year Treasury note rose from a 200-year low of 1.442 percent in June 2012 to around 2.17 percent by the end of 2014. For more, see Relationship Between Treasury Yields and Mortgage Rates.What About Foreign Ownership of the Debt?Japan owns $1.09 trillion in U.S. debt. As of December 2016, it was the largest foreign holder. China owns $1.058 trillion. Both Japan and China want to keep the value of the dollar higher than the value of their currencies. That helps keep their exports affordable for the United States, which helps their economies grow. That's why, despite China's occasional threats to sell its holdings, both countries are happy to be America's biggest foreign bankers. China replaced the United Kingdom as the second largest foreign holder on May 31, 2007. That's when it increased its holdings to $699 billion, outpacing the United Kingdom's $640 billion. Ireland is third, holding $288 billion.
The Cayman Islands is fourth, at $264 billion. The Bureau of International Settlements believes it is a front for sovereign wealth funds and hedge funds whose owners don't want to reveal their positions. So are Luxembourg ($223 billion) and Belgium ($120 billion). Brazil is the fifth largest holder at $259 billion. The next largest holders are Switzerland, the UK, Hong Kong, Taiwan and India. They each hold between $118 and $229 billion. (Source: “Foreign Holding of U.S. Treasury Securities,” February 15, 2017. "Petrodollars and Global Imbalances," U.S. Treasury, February 2006.) Data are from various reports that are released at different times. Therefore, the numbers in this article may not add up to $19.9 trillion.Oversized storage bags protect your large objects against moisture, dust, bugs and spiders. Tough 2 mil plastic is see through to show contents and heavy-weight to resist tears and punctures. Oversized storage bags seal up those big objects you used to cover with several smaller bags or tried to tie a tarp over.
With Banana Bags you just put that bulky object in the bag. These are ideal for disposing of infested items or storing large items in attics, basements or storage lockers. Note: Full and Full XL Mattresses with a pillow-top should use the larger CB-70 Queen/Full bag size.Like so many bus benches, street sweeping signs, and abandoned TVs, discarded mattresses and box springs are a fixture of the Los Angeles street-scape. But a bill in the state legislature would force mattress retailers to recycle all mattresses. When you buy a mattress, the recycling fee would be added to the cost. But today, what happens to mattresses that get picked up off the street, or by the crews that deliver your new one? KPCC's Kevin Ferguson has the answer. Most of the time, a mattress's life starts with metal. At a factory in Orange, dozens of mattress-shaped inner springs are tucked into shelves like giant wire books—I’m on a tour of Custom Comfort, a mattress manufacturer and retailer with about half a dozen stores in and around LA.
Jeremy Solis, the director of operations, is my guide. "Inner springs in a mattress are really designed to create the difference between the firmness and softness of a mattress, not necessarily the quality," he says. "So they're gonna be the strongest thing in any mattress you buy." The springs are then upholstered, stuffed with cotton, and shot with a giant air powered staple gun to fasten everything on. All told, it takes just a couple hours to go from springs to bed. Then the mattress is trucked to a store, and eventually, your bedroom. But if you're replacing an old mattress with a new one, where does the discarded mattress end up? Out With The Old? In his apartment in Santa Monica, Adam Rakunas has been waiting three hours. The company said Adam could expect his family's brand new, organic cotton and foam mattress to show up today between 9 and noon. In the living room, the old mattress waits. For Adam and his family, this has been a long time coming.
They went to stores all over the city, laid on countless floor models, and then waited six weeks for their mattress to be made and delivered. And even though they've been married since 2004 and have a 3-year-old, Adam says this feels like one of their first grown up couple purchases; the mattress has been his wife's since 1993. "This was her first real bed after starting her job," says Rakunas. "And she brought it with her to Kuala Lumpur, and then to Singapore and then to L.A. and then to here, when we moved in together. It’s been our bed for the past nine years. 20 years is a good time to use a mattress, and now I think it’s time for something new." Finally, a knock on the door. In come two deliverymen with the foam mattress in three pieces. They rush into the bedroom, tear off the plastic wrap and assemble the mattress. Adam signs a paper and they're gone. The whole process takes less than five minutes. But the deliverymen didn't pick up the old mattress—it’s still in the living room.
Luckily, Adam’s family found a neighbor happy to take it. But say you bought a new mattress and you're stuck with the old one. You don't want to dump it on the street, looking sad, dirty and alone in the rain. So what do you do? Cora Jackson, spokesperson for Los Angeles' Department of Sanitation, says to call 311. "We offer a free service to the residents of Los Angeles and that is our bulky item pick up service," she says. "We will come and collect that mattress and arrange to pick it up as soon as possible. Usually on the collection day that we already pick up your bin." And a trash truck will take your mattress to its final resting place: a landfill. The city says it hopes to start recycling mattresses soon, but that's under negotiation. Sometimes, the deliverymen will pick it up for you. Companies like Sears, Sit N Sleep, and Macys will deliver your new mattress and take your old one, sometimes for a small fee. Jeremy Solis says Custom Comfort does that, too.
"Typically, what we do is we have a trailer outside," says Solis. "We store all the old mattresses in the trailer. And we've got a guy that comes by and picks them up every night." Where Old Mattresses Get A Second Chance There’s a good chance your old mattress will end up in the capable hands of Don Franco. The president of Gateway Mattress company in Montebello, California. Standing in a huge outdoor storage yard with Franco, I point out the hundreds of mattresses we're surrounded by."There's thousands of mattresses out here. All in storage, ready to either be stripped down, to be recycled, or to be rebuilt depending on the condition of the old bed." Gateway is the state's largest mattress refurbisher. For 53 years, it’s been turning old mattresses into new ones. This huge storage area is at least as large as a football field, and it's easy to imagine that nearly every old mattress in Los Angeles ends up here. Some look dirty, some as good as new, but they all go through the same tearing down and rebuilding process.
Inside, Gateway looks a lot like a typical mattress factory, you'd only notice a difference at the end of the mattress' journey: "At that point, then it has to go through an oven, which runs for 205 degrees for an hour and a half," says Franco. "It takes all the impurities out of the bed. And we have six ovens that run roughly 16 hours a day, sanitizing these mattresses." The ovens, which kill bacteria and bugs, are a state requirement. They're off to places like discount stores, motels, or convalescent homes. You probably already figured out the problem with mattress rebuilding: it's kind of an unsettling thought. Retailers won't admit they sell refurbished mattresses and because of that, it's hard to know what kind you're buying. An unmarked, tagless mattress could have come from a place like Gateway or an unlicensed refurbisher. If the state law requiring mattresses recycling passes, you'll probably see more mattresses end up at places like Blue Marble Materials, just a ten minute drive from Gateway in Commerce, run by Tchad Robinson.
When a mattress arrives at a plant like Tchad's, instead of being rebuilt, it's taken apart piece by piece: the metal springs are melted down, the wood is turned into chips. Robinson says the possibilities are endless: "The polyurethane foam is a valuable material in there. The cotton that can come out of a mattress, is very valuable," he says. "The shoddy, which is sort of a thick dense wool, multicolored wool material that can be used for sound insulation, for thermal insulations, quite a few applications for that that, and also the outside cover." Right now, Robinson takes in over 300 mattresses a day. If a recycling law passes, businesses like his stand to see a huge windfall. But the future for rebuilders like Don Franco is more uncertain. More mattresses getting recycled could easily mean fewer mattresses getting refurbished. His company makes mattresses from scratch, but that's only 30 percent of the business. Unfortunately, there are other rebuilders, not only in California but in other states that don't really follow the rules and regulations.