Foreign Governments Own Large Portion of Total US National Debt
The United States currently has a total outstanding public debt load of nearly $12 trillion dollars ($11,827,966,342,208.43 to be exact).
This means that every man, woman and child in the United States currently owes $38,930 as their share of the total national debt.
Many people see this staggering figure and ask the question - who does the United States owe all of this money to?
To start to answer this question, let's first divide up the total national debt into two different categories - public debt and intragovernmental holdings.
As of September 17th, the US government had $7.52 trillion dollars in public debt, and an additional $4.3 trillion dollars in intragovernmental holdings.
Intragovernmental holdings represents money that the federal government has borrowed from various agencies, such as Social Security.
For instance, in the case of Social Security, the federal government has borrowed over $2 trillion dollars from the program in the form of special series, non-marketable US bonds. If the Social Security program takes in more money than it pays out, then the federal government will borrow the difference.
The government also borrows money from other programs, but Social Security is its favorite source of funding.
Next up - public debt.
Public debt is, for the most part, owned by these entities:
Countries such as China, Japan, Brazil and the United Kingdom all own at least $100 billion dollars of US debt. China currently owns the most, having nearly $750 billion dollars worth of US debt to its name as of January 2009.
China and Japan own nearly a trillion and a half dollars of US debt between the two of them.
Why do you think that the United States has sent at least two high-level envoys to China over the past year? It's because they are desperate for China to continue buying US debt, especially given the fact that the US will need to borrow nearly $10 trillion dollars MORE over the next decade to fund its deficit spending.
Economists predict that Social Security will no longer be a source of funding by around 2015, as the government will have to start paying out more than it takes in, barring any legislative changes.
This is one of the reasons why countries such as China and Japan will play such an important role over the next decade or so. If they decide that US debt is not a very smart investment, then the printing presses in the United States will need to hit overdrive.
This is never a good thing, but it seems almost unavoidable at this point.
Source: U.S. National Debt Clock
Filed under: General Knowledge