WHO OWNS OUR 31 TRILLION IN DEBT
Written by Peter Boykin on September 16, 2022
Shared By Peter Boykin – American Political Commentator / Citizen Journalist
WHO OWN’S OUR $31 TRILLION IN DEBT?
By the end of this month, the U.S. national debt will reach $31 trillion.
So it got me thinking:
Who owns our debt?
Back up: Before we dive in, it’s important to understand how someone can come to own our debt. It’s a complicated process but in the simplest terms…
When our government spends money it doesn’t have, the U.S. Treasury Department creates new money by selling our debt in the form of Treasury bills and bonds.
These are long and short-term investments where the buyers basically earn interest for lending the U.S. their money.
Ok. Back to who owns our debt…
It breaks into two categories:
Of our $31 trillion dollars of national debt:
$24.3 trillion is held by the public
$6.6 trillion is held by the U.S. government
$6.6 trillion held by the U.S. government:
It’s strange to imagine that the government can hold its own debt, but when agencies like Social Security take in more revenue than they need in a given year, it will invest the money in Treasury bonds rather than letting the money lose value through inflation.
$24.4 trillion held by the public:
This is a very broad category that includes corporations, individual American investors, your state and local governments, mutual funds, the Federal Reserve [a conversation for another day], foreign investors, foreign governments, etc.
Foreign governments own roughly 1/3 of our public debt, or $7.4 trillion.
Here are the top 5 holders of our debt:
?? Japan: $1.2 trillion
?? China: nearly $1 trillion
?? U.K.: $615 billion
?? Luxembourg: $306 billion
?? The Cayman Islands: $300 billion
There’s no shortage of takers looking to buy U.S. debt.
It’s considered one of the safest investments in the world because the U.S. always pays its debts. But just because we can put ourselves into debt, doesn’t mean we should. Our children and our children’s children are the ones who will inherit the bill for our reckless spending.
Thomas Jefferson once said:
“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
[Source: Investopedia, Fox Business, The Balance]
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