Both. But, IMO more the former, based on personal observations.
What might be a useful indicator is the scarcity of 22 LR. I can't imagine the government buying up that caliber. I hear a lot say they have anywhere from 5k to 15k rounds stashed. Also, reports of LE having the same difficulties as we would indicate to me that civilians are doing their share of the hoarding. Which, also in my opinion is a good thing. Personally, I'd like the law abiding portion of our citizenry to be armed to the teeth, and the despots in the state & federal governments to be well aware of it.
Can't be too rich, too thin, or own too many firearms or too much ammo.
Interesting side note: The next time you see a photo of an M1 series Abrams tank, take a look at the gun mantlet (where the main gun meets the turret). To the side of the main gun is the smokebox for the coax machine gun. Directly above the main gun there is a flat metal bracket with a couple holes drilled in it.
Although that bracket has a number of uses, one of the primary design functions was so that where tank crews had limited range facilities, an M2 HB or an M16 could be mounted there, with a trigger actuator wired into the gunner's controls inside the turret, and the smaller weapon could be traversed, elevated and depressed just like the main gun, allowing the gunner to practice engagements from inside the turret using his primary and auxiliary sights on regular rifle ranges.
Where ranges were even more limited, one could put a .22LR adapter in the M16, and for this purpose the military purchased .22LR tracer ammo.
Nowadays, Conduct Of Fire Trainers (COFTs) and other simulators make the whole practice somewhat superflous if not entirely unnecessary, but at least for some time, the US Army Armor Branch was the proponent for, and consumer of at least a little bit of pretty neat .22LR tracer ammo :-)