The True Story of America’s Debt

Here’s the big idea:

Most people believe that China, and to a lesser extent Japan, own most of America’s $14.3 trillion in government debt.

But it’s just not entirely true. While the Chinese, Japanese, and plenty of other foreigners own substantial amounts, it’s really Americans who hold most of America’s debt.

Here’s a quick and shocking breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

Social Security trust fund: $2.67 trillion (19 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
China: $1.16 trillion (8 percent)
U.S. households: $959.4 billion (6.6 percent)
Japan: $912.4 billion (6.4 percent)
State and local governments: $506.1 billion (3.5 percent)
Private pension funds: $504.7 billion (3.5 percent)
United Kingdom: $346.5 billion (2.4 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Commercial banks: $301.8 billion (2.1 percent)
Mutual funds: $300.5 billion (2 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Brazil: $211.4 billion (1.5 percent)
Taiwan: $153.4 billion (1.1 percent)
Caribbean banking centers: $148.3 (1 percent)
Hong Kong: $121.9 billion (0.9 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

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Comments

  1. Ed Rector's Gravatar Comment by Ed Rector on April 30th, 2012 at 12:27 pm

    Why should we care who “owns” America’s debt instruments?? If China or Japan doesn’t want to hold them any longer they can sell them on the open market. When/if they do sell them they will receive US dollars. Then what will they do with the US dollars?? Either spend them (on US exports) or find someplace to invest them (in US dollar denominated financial assets.) These transactions go on every day.

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