As of December 15, 2015, the U.S. is$18.8 trillionin debt.
Who owns the U.S. debt?
There are two basic categories ofdebtowners: 1)the public, which includes foreign investors and domestic investors and, 2)federal accounts, also known as "intragovernmental holdings." Each category is explained below.
Debt Held by the Public: Foreign Investors
Thirty-four percent of the U.S. debt is held internationally by foreign investors (i.e. foreign governments, foreign institutions, andindividual people in foreign countries) who buy our Treasury bonds as investments. The graph below ranks foreign investors' holdings by country.
Debt Held by the Public: Domestic Investors
Public debt is also held domestically. Domestic private investors - which includes regular American citizens as well as institutions like private banks - own 15% of the national debt.
The U.S. Federal Reserve Bank buys and sells Treasury bonds as part of its work to control the money supply and set interest rates in the U.S. economy, so they hold some of the debt (13%).
Finally, U.S. state and local governments have also lent money to the federal government, making them owners of 13% of the national debt.
Debt Held by Federal Accounts
Debtheld by federal accounts is not considered public debt - it is the amount of money that the Treasury has borrowed from itself. That may sound funny, but it means that the Treasury borrows surplus money from onetrust fundand gives it to another trust fund. For example, the Treasury might borrow money fromSocial Securityto finance current government spending in another area. At a later date, the government must pay that borrowed money back. Federal accounts currently hold 28% of the national debt.
(Note: The Federal Reserve is not counted as "debt held by federal accounts" because the Federal Reserve is considered independent of the federal government).
Discover more about the federal debt:
FAQs
The $34 trillion gross federal debt includes debt held by the public as well as debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself.
Is it possible for the US to pay off its debt? ›
It ultimately comes down to the U.S. taxpayers. That means in order to pay it off, or at least make a larger dent in the debt, the federal government would have to raise taxes and cut spending.
What happens if the U.S. debt gets too big? ›
Rising debt means fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.
What is the main cause of U.S. debt? ›
The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone. Decreases in federal revenue are largely due to either a decrease in tax rates or individuals or corporations making less money.
How long would it take to pay off the national debt? ›
It's 22% higher than the U.S. gross national product as of June 30 (about $27 trillion). It's six times the U.S. debt figure in 2000 ($5.6 trillion). Paid back interest-free at the rate of $1 million an hour, $33 trillion would take more than 3,750 years.
Who do we owe the U.S. debt to? ›
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
How much does China owe the US? ›
The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
Has the US ever been debt free? ›
By January of 1835, for the first and only time, all of the government's interest-bearing debt was paid off. Congress distributed the surplus to the states (many of which were heavily in debt). The Jackson administration ended with the country almost completely out of debt!
Why is America in so much debt? ›
Nearly every year, the government spends more than it collects in taxes and other revenue, resulting in a deficit. (The debt ceiling, set by Congress, caps how much the U.S. can borrow to pay for its remaining bills.) The national debt, now at a historic high, is the buildup of its deficits over time.
Should we worry about US debt? ›
He said debt is an important tool for a country, and its importance is why we should be so concerned. Cochrane points out that during the Great Recession and the COVID-19 shutdown, the United States was able to swoop in fast with billions for bailouts, stimulus checks and aid programs.
The national debt is the total amount of money the U.S. owes its creditors, which includes “the public” (individual investors, businesses, commercial banks, pension funds, mutual funds, state and local governments, the Federal Reserve System and foreign governments) as well as other parts of the federal government, ...
How bad is US debt compared to the world? ›
The United States has the world's highest national debt with $30.1 trillion owed to creditors as of the first quarter of 2023.
How will America get out of debt? ›
Most include a combination of deep spending cuts and tax increases to bend the debt curve. Cutting spending. Most comprehensive proposals to rein in the debt include major cuts to spending on entitlement programs and defense.
Why doesn't America pay off its debt? ›
This is because America doesn't actually pay off debt, but only rolls it over. When it's time to repay old debt, the Treasury simply issues new debt to cover repayment of what was originally borrowed, plus the accrued interest that's due.
What country is not in debt? ›
Singapore is one of Asia's major financial centers. It is also one of the most prosperous countries on the planet. And all this has been achieved without taking on any meaningful public debt. In fact, very much like Norway, Singapore has more assets than debt.
What is the real federal deficit? ›
The government ran a cumulative deficit of $1.7 trillion in FY2023 ($368 billion more than the prior fiscal year when adjusted for timing shifts*). Revenues were $4.4 trillion, a decrease of 9%, largely due to: $326 billion (8%) decrease in individual income and payroll tax revenue.
Who owns most of the US national debt? ›
Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
How much does the US owe China? ›
China is one of the United States's largest creditors, owning about $859.4 billion in U.S. debt. 1 However, it does not own the most U.S. debt of any foreign country. Nations borrowing from each other may be as old as the concept of money.
