Purpose statement

My 11th grade English teacher had us start every essay with a purpose statement: "I am writing a ___ for people who ___, so that they can ___." I still find this practice valuable.

I'm writing a summary of recent articles about US federal payment systems for my friends in the US, so that you can understand a risk to your safety and take steps to prepare.

This document contains no new ideas or original research. It's less of an "essay" or "article" and more of a project brief at your job. Nonetheless, it matters more than any poem I've ever written. It could help keep you safe.

In sum: Trump's executive branch and DOGE are trying to take direct control of the core "plumbing" that moves money around. They intend to gain unchecked power to freeze or withdraw any transaction they don't like, overriding Congress's constitutional authority to pass budgets. At best, every US bank account is now a slightly riskier investment than it was last year. At worst, millions of people could die.

That's a big claim. Why should you listen to me? First, I'm a bit of a prepper, meaning I take sensible precautions to be ready for extreme weather and other disasters. I've developed a nose for telling plausible disaster scenarios from fanciful ones. In 2018 I guessed that the world was due for a pandemic and stocked up on N95s. Second and more important, you should listen to me because I listen to Notes on the Crises, an independent blog about monetary infrastructure whose main author, Nathan Tankus, has written for outlets from Wired to The Rolling Stone to Bloomberg's Odd Lots (beloved of many a fintech founder). NC pivoted to wall-to-wall coverage of this specific issue for months—that's how important they thought it was. I sourced most of this document from their reporting.

Context

When Congress passes a bill that allocates $100 billion to ICE, how does the money get into the ICE bank account, and from there, to states, cities, and individuals? Who actually sent the COVID stimulus checks?

The answer is the Bureau of the Fiscal Service, an obscure 2,000-person office in the Treasury. The BFS handles the boring, technical, crucial work of routing and verifying payments that flow from Federal agencies to recipients including states, contractors, and individual people. In 2024, the BFS processed 1.4 billion transactions worth $5.4 trillion: that's 88% of all federal government payments. As *Notes on the Crises *puts it, "the Bureau of the Fiscal Service is the pulsating payments heart of the entire federal government."

The BFS doesn't (or didn't) decide whether a payment is politically good or bad. By the time a payment reaches the BFS, those political decisions have already been made: Congress passed a budget, the President signed off on it, and agency heads decided how to allocate it. The BFS's job is to move the money. It can flag "improper payments" and check with the agency that issued them, similar to how your bank might email you about suspicious activity. The BFS can also reverse improper payments, for example, if a recipient died but a payment went out before the government received a death notice.

To do all this, the BFS uses ancient COBOL code patched with decades of workarounds. "The number of people who comprehensively understand these legacy IT systems can likely be counted on two hands—and that may be optimistic" (NC).

Squeezing the US economy through a chokepoint of decades-old code isn't ideal. But that's not the scary part.

The scary part

Trump, DOGE, and Trump's Office of Management and Budget are turning the BFS into a weapon. The goal is to reach into the stream of payments and pluck out ones they don't like. Achieving this goal would give the executive branch the power to instantly block or reverse federal payments.

As a low-key prepper, I tend to ignore "shit-hits-the-fan" scenarios. They're usually fantasies. But the worst scenario I describe below could have been so sudden, so vast, and so dire that the only appropriate comparison would have been a disaster movie.

If we were in a disaster movie, this would be the scene where raving scientists try to warn everyone. Monetary policy wonks aren't prone to hyperbole. But after learning about what DOGE attempted at the BFS earlier this year, Notes on the Crises' Nathan Tankus told one of his sources, "you need to get those children out of there before they kill us all."

Risk scenarios

Let's talk about how they could kill us all. In order of increasing severity:

1. Bad. We are here. Trump and DOGE try to weaponize the BFS. Sometimes they succeed; sometimes a judge stops them. This is happening right now (see next section). For now, the administration seems to be obeying court orders about some payments, but that hasn't stopped them from blocking others. For example, a judge forced the administration to return $80.5 million that it withdrew from from the City of New York's bank account in March. That didn't stop the Department of Education from blocking $7 billion worth of payments in July.
2. Worse. Trump and DOGE successfully weaponize the BFS. Judges can't or don't stop them. Uncle Sam can now take money from any bank account, instantly, for any reason or no reason, on purpose or by accident.
3. Much worse. Scenario 2 happens, but the administration messes with too many payments, spooking investors. The dollar shatters. This wouldn't be a "financial crisis". It would be worse.
   • To understand why interfering with payments is a systemic risk, we need to spend a moment with the idea of payment finality. Payment finality just means that when I pay you, the transaction is 100% settled and we can both walk away. Some economists argue that this is what money is: a tool for making transactions final. If the US, the bedrock of the world's money system, decides that some payments aren't final, that has consequences. This is what I mean when I say the dollar could "shatter": different groups of dollars could end up being worth different amounts. For example, let's say you and I each have $100 in our bank accounts, but you get Social Security payments. If the government can reverse Social Security payments, then your bank, mortgage lender, or retirement broker might make the logical conclusion that your $100 is a riskier asset, and therefore worth less, than my $100. "Dollars" could cease to be a single currency with a single value, instead fragmenting into a bunch of different account balances, each with unpredictable values. This is bad for getting stuff done that requires money.
4. Worst. We probably dodged this one. DOGE tries to edit some BFS code and makes a mistake. Because the system is held together with band-aids, no one knows how to undo the damage. ACH breaks. Account balances become meaningless. Destruction and death akin to a nuke or an asteroid strike. This scenario is less likely than it was in February, but we'll never know how close we came. Marko Elez, a DOGE staffer with no training, was given read/write access by accident. They eventually fired him, likely because of Wired and NC's reporting. Paul Krugman interviewed NC's Nathan Tankus in March, after Elez got fired. As Tankus explained, "I think we're past that risk. [...] I think they didn't know what they were playing with, and then they really were kind of taken aback by the strong reaction. [...] But saying 'OK, the payment system isn't just going to break because Marko Elez hit the wrong button' is papering over the fact that this constitutional crisis is still extraordinarily serious. And they got much further quicker than I thought they would be able to. Things are hanging by a thread with them continuing to respect court injunctions."
   • Side note: similar meltdowns could happen at Social Security or the IRS. Paychecks and tax refunds could be delayed; you could get audited by accident. From NC: "With DOGE’s entrance into the IRS, the specter of catastrophic system-wide failure certainly looms large" (6/12/25). This would do less damage than breaking the Treasury payments system, but it could still be Great-Depression-bad.

What has already happened

This isn't a complete timeline, nor is it an attempt to scare you. The goal of this section is to add substance to the scenarios above.

• 1/31/25: Everything About the Trump Administration’s Impoundment Putsch You Were Too Afraid to Ask (NC)
  • The Trump administration started work toward siezing payment systems in its first week, through executive orders. "The rhetorical framing of these executive orders obscures their most urgent goal. That is: taking far greater control over Congress’s authority to spend."
  • This is unconstitutional, if you care about that. It functionally ends separation of powers by giving the President operational control over which laws get implemented. In rare cases, the constitution lets the executive branch "impound" some congress-approved payments, but only if the law that allocated the money also explicitly permitted impoundment. The executive branch wants to throw out the constitution and impound any payment.
• 2/3/25: Elon Musk Wants to Get Operational Control of the Treasury’s Payment System. This Could Not Possibly Be More Dangerous (NC, republished in Rolling Stone).
  • David Lebryk, the highest-ranking non-political-appointee at the BFS, and Trump's Acting Treasury Secretary for a time, was forced to resign over DOGE's attempts to access payment systems.
  • This was the incident that pushed NC to pivot to around-the-clock coverage of this issue through late April.
  • "I have always tried to write Notes on the Crises in a calm, detached tone so that the information I highlight shines through. However, I must be honest with readers: I’m absolutely terrified. [...] There is nothing more important on the entire planet than getting DOGE out of the Bureau of the Fiscal Service."
  • Followup article with more detail, 2/12/25: "Day Thirteen of the Trump-Musk Treasury Payments Crisis of 2025: Bombshell Court Filings Confirm Wired & Notes on the Crises Reporting & Raise Alarms About BFS-Based Impoundment" (NC).
• 3/13/25: "Can Trump Arbitrarily Take Money from Anyone's Bank Account? The Federal Government's Debiting $80.5 Million from New York City's Bank Account Suggests Yes" (NC, republished in Rolling Stone).
  • On 2/11, FEMA withdrew $80.5 million from New York City's bank account. This was a political appointee of the executive branch controlling which laws are enacted, by controlling the money allocated to enact those laws at the payment level.
  • Unclear who pressed the button. Someone at FEMA? Someone at the BFS? Was this person working for DOGE or Trump? The withdrawal does seem to have been motivated by an Elon Musk tweet.
  • The City of New York sued the government over this.
• 4/19/25: Paul Krugman interviewed NC's Nathan Tankus. This interview covers roughly where things stood as of that date.
• 5/28/25: Judge lets four more DOGE employees access US Treasury payment systems (Ars Technica). DOGE sent 4 more staffers to get payment systems access. After being forced to get trained, they're in.
• 6/25/25: Trump administration is preparing to challenge budget law, U.S. officials say (WaPo).
  • "The Trump administration is preparing to test a 1974 budget law [The Impoundment Act] by refusing to spend congressionally mandated funds, senior federal officials say — an escalation that could change the balance of power between Congress and the White House."
  • In addition to covering the current battle over impoundment, this piece is a good intro the 1974 Impoundment Act.
• 7/1/25: Trump Withholds Nearly $7 Billion for Schools, With Little Explanation (NYT).
  • The Times framed this as an education policy story. It's a separation of powers story.
  • "The Trump administration has declined to release nearly $7 billion in federal funding [...]. The money was expected to be released by Tuesday. But in an email on Monday, the Education Department notified state education agencies that the money would not be available. The administration offered little explanation, saying only that the funds were under review. It gave no timeline for when, or if, the money would be released, saying instead that it was 'committed to ensuring taxpayer resources are spent in accordance with the president’s priorities.' [...] The move is likely to be challenged in court and has already been criticized as illegal by Democrats and teachers’ unions, who emphasized that the money had been appropriated by Congress and was approved by President Trump in March."
  • 7/25/25: Trump administration releases billions it withheld from schools (WaPo).
    • After 24 states sued, the DOE released the funds—or said they would.
    • "The administration official said Friday that 'guardrails' will be in place 'to ensure these funds will not be used in violation of executive orders or administration policy.' It was not immediately clear what those guardrails will be or when school districts will see the funds."
• 7/30/25: $15 billion in NIH funding frozen, then thawed Tuesday in ongoing power war (Ars Technica).
  • "Amid the Trump administration's ongoing efforts to wrest the power of the purse from Congress, an estimated $15 billion allotted by lawmakers to fund life-saving biomedical research via the National Institutes of Health was temporarily frozen and then said to be released Tuesday." Emphasis mine: note how hard it is to even know what's happening with payments. "NIH leaders received a four-sentence memo Tuesday afternoon telling them of a pause of all NIH grant research funding."
• 8/2/25: E.P.A. Moves to Cancel $7 Billion in Grants for Solar Energy (NYT)
  • This is technically a different topic: the mechanism the EPA is using to cancel grants isn't impoundment. I include this article here because it rhymes with the administration's broader goal to exert political control by clawing back funds.

"But I'm ______. I'm safe, right?"

• This crisis threatens hundreds of millions of people and could strike anyone, near-instantly, potentially at random. If you see yourself as part of a politically favored group, you're still at risk. If you see yourself as outside the monetary system because you're broke, you're still at risk.
• Control over payments is a force multiplier, making any executive decree more powerful. For example, Trump wants to target naturalized citizens who "abused PPP loans" and take away their citizenship. That can be slow and annoying to do, especially if you follow due process. But what if you could just grab a list of naturalized citizens who were born in, say, a country with a travel ban, LEFT JOIN that list to a list of all PPP loan recipients, and withdraw that amount of money from their bank accounts? Sounds like a great way to "encourage self-deportation."
  • In a similar way, doing a coup is slow and annoying. You have to send people to sieze government buildings. But what if you didn't have to send anyone? "Without political control of [the BFS], the Trump administration and Elon Musk must chase down every agency and bend it to their will. They are in the process of doing that, but bureaucrats can notionally continue to respect the law and resist their efforts. [...] But if Musk and Trump can reach into the choke point, the Bureau of the Fiscal Service, they could possibly not need agency cooperation. They can just impound agency payments themselves." (NC)
• It's important to emphasize that randomness, AI hallucination, and incompetence make it more likely that this crisis will affect you specifically, even if you think you're safe.
  • Let's say one of those PPP loan recipients in the previous bullet had the same first name, last name, and country of origin as you. Oops! You just lost $50,000. Time to contact the government and try to prove your identity.
  • Have you ever gotten a tax refund, unemployment check, social security payment, COVID stimulus, or tax rebate? DOGE could ask ChatGPT to reverse all payments that look similar to a small sample of transaction IDs they don't like, going back 5 years. Your account balance could just go negative, either on purpose or by chance.
  • A similar real-world example from May. At Social Security, These Are the Days of the Living Dead (KFF Health News).
    • The Social Security Administration intentionally moved the social security numbers of thousands of legal immigrants to the Death Master File, marking them as "dead."
    • Less well publicized but in some ways more concerning, Social Security also moved an unknown number of US citizens to the Death Master File by accident, causing a spike in requests for "resurrection."
  • Mistakes won't slow the government's efforts to sieze payment systems. In fact, chaos will help. It's a simple playbook: (1) break systems to spike the number of "improper" payments, (2) use the high number of "improper" payments as justification to further centralize control. It doesn't matter whether the administration is competent enough to use this playbook on purpose or stumble into it by accident: it works either way.

What should I do?

On some issues, calling your sentator really does matter. Not this one. Your senator won't know what you're talking about and couldn't help if he did. I wrote this because we're on our own.

• Prep. Preppers are an opinionated bunch, so I won't present my suggestions as gospel. But here's what I'm doing, in addition to my usual preps for power outages and whatnot.
  • Print out at least 2 copies of your essential documents and put them in fireproof envelopes. Social security card, driver's license, last year's tax return, passport, diploma, two utility bills. You should do this anyway, but it's even more important for this crisis. If your SSN gets moved to the Death Master File, or if your unemployment benefits from years ago get withdrawn, you'll want proof of identity.
  • Join or form a group of people connected across borders and currencies. This doesn't need to be anything fancy. I'm lucky to have family, friends, and translator friends in half a dozen countries. We're not "organized," we're just friendly and in touch.
  • Unfortunately, these next 3 steps cost money. I suggest cheaper alternatives for each. If you can afford these, consider making a plan to help friends who can't.
    • Keep $1k of physical dollars. If messing with payments leads to some dollars being worth more than others, the most valuable kind of dollars will likely be paper money that can't be digitally clawed back.
    • Consider keeping up to $1k of physical gold. I know, this sounds insane. I'm no goldbug, fantasizing about a post-collapse barter economy. I'm the opposite: I think gold is useful because there's robust global infrastructure for turning it into cash. If the dollar shatters, you'll probably still be able to go to a coin shop in most countries and sell your gold for the local currency. Practical tips for buying gold:
      • Buy from Costco. Seriously. They sell near market price. Buy with a credit card for cash back points!
      • Silver is more volatile but cheaper, so it's an option if you can't drop $3k on a 1oz gold bar.
      • It's a common misconception that jewelry works as a store of value. Most of the price of jewelry comes from the labor of working it into trendy shapes (one reason why vintage jewelry is often a good deal). If you pawn your wedding ring, you won't get much.
    • Consider keeping up to $1k of crypto. (I know, I know.) Like gold, crypto has a global infrastructure for turning it into cash. Pick a coin that's widely accepted at exchanges and has fast transaction times (so, not bitcoin). Don't store your crypto on an exchange, especially not a US-based exchange. Put it on a "hardware wallet" or just print out the secret key and don't lose it.
    • Consider getting a foreign bank account. I haven't looked into this so I don't have useful details.
• Panic. In the financial sense. A market crash is the only signal this administration will hear. Unfortunately, as NC puts it, "the stock market is a conventional wisdom processor": it's not great at pricing in huge, binary, existential risks that exceed the bounds conventional wisdom. But if you have a net worth over $1M, it can't hurt to try. Tell your financial advisor and rich friends that you're panicking about this, so they can tell their friends and spread fear into global markets.
• Consider emigrating. Look, I'm not leaving. I want to build a climate adaptation utopia in the South. But if you're here for less deranged reasons, you may want to move somewhere with a different currency.
• Connect and share resources. As with other crises, the best way to adapt is to build interdependent pockets of stability and safety that don't require the state or other large organizations. Paraphrasing NC again, sex workers and immigrants likely have direct experience with monetary infrastructure. If that's you, congrats: you have a head start. If you have friends, family, or professional contacts in these areas, it's a good time to seek advice.

Conclusion

There's no conclusion but I wanted to wrap this up in some way that sounded good.