To Whom Does the U.S. Government Owe Money?

From the end of its 2017 fiscal year to the end of its 2018 fiscal year, the U.S. government’s total public debt outstanding increased by $1,271 billion, or $1.3 trillion, to reach a total of $21,516 billion, or $21.5 trillion. Put a little bit differently, the U.S. national debt grew at an average rate of nearly $3.5 billion per day on every day of the government’s 2018 fiscal year.

That’s a very large number, but 2018 was only the sixth largest annual increase for the U.S. national debt in terms of nominal U.S. dollars. Larger increases were recorded during President Obama’s tenure in office in 2012 ($1,276 billion), 2010 ($1,294 billion), 2011 ($1,300 billion), 2009 ($1,413 billion), and 2016 ($1,423 billion).

So it’s not an accident that the U.S. national debt has risen to $21.5 trillion, where these six years combined account for 37% of the official U.S. national debt. But to whom does the U.S. government all that money?

The following chart breaks down who the U.S. government’s major creditors were at the end of its 2018 fiscal year, which is based on preliminary data that will be revised in upcoming months.

According to the U.S. Treasury Department, the U.S. government spent some $779 billion more than it collected in taxes during its 2017 fiscal year. The difference between this figure and the $1,271 billion that the total national debt officially rose can be attributed to the government’s net borrowing to fund things like Federal Direct Student Loans, which have combined to account for over $1.2 trillion of the government’s $21.5 trillion debt, or 5.7% of the total public debt outstanding since 2010.

Overall, 71% of the U.S. government’s total public debt outstanding is held by U.S. individuals and institutions, while 29% is held by foreign entities. For FY2018, China has retained its position as the top foreign holder of U.S. government-issued debt, with directly accounting for 6.2% between institutions on the Chinese mainland and Hong Kong, even though the country has been reducing its holdings of U.S. government-issued debt.

Japan ranks as the second largest foreign holder of the U.S. national debt, with the U.S. owing Japanese institutions 4.8% of its total debt. After that, the European international banking centers of Belgium, Ireland, and Luxembourg combine to account for 3.2% of the U.S. national debt, followed by Brazil at 1.5% and the United Kingdom with 1.3%.

The largest single institution holding U.S. government-issued debt is Social Security’s Old Age and Survivors Insurance Trust Fund, which is considered to be an “Intragovernmental” holder of the U.S. national debt, and which holds 13.0% of the nation’s total public debt outstanding. The share of the national debt held by Social Security’s main trust fund has begun to decline as that government agency cashes out its holdings to pay promised levels of Social Security benefits, where its account is expected to be fully depleted in just 16 years. Under current law, after Social Security’s trust fund runs out of money in 2034, all Social Security benefits would be reduced by 23% according to the agency’s projections.

The largest single “private” institution that has loaned money to the U.S. government is the U.S. Federal Reserve which, like China, has been reducing its holdings of U.S. government-issued debt. At the end of September 2018, the Fed held just under 11% of the U.S. government’s total public debt outstanding. In FY2018, other U.S. institutions such as pension funds and insurance companies have significantly increased their holdings of U.S. government-issued debt as interest rates have risen.

Data Sources

U.S. Treasury. The Debt To the Penny and Who Holds It. [Online Application]. 28 September 2018.

Federal Reserve Statistical Release. H.4.1. Factors Affecting Reserve Balances. Release Date: 26 September 2018. [Online Document].

U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 17 December 2018.

U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2018 Through September 30, 2018. [PDF Document].

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• raburgeson

  Most of it to the people. Banksters printed worthless money and made the people accept it for goods and services. The inflation cost the people. Much of the stolen money can be recovered and since it is just fantasy can be burnt. They have not just stole the base of the economy they have stole more assets than you know about. Most of these can be recovered too. They have been withholding scientific innovations that can propel the economy into the future for a century. A lot of work but, recovery is possible.

  Jan 23, 2019, 9:52 am 0 Reply
  • Rockledge

    Sadly, the type of “capitalism” we practice in the united states strives on the fact that a good economy for the corporations is a bad economy for the working man.
    The type of capitalism we practice feeds on low wages and high consumer prices.
    When the stock market is soaring the working man is paying high taxes, high consumer prices, and working his ass off for a lot of hours and low wages.
    Of course, that is not what we are taught about capitalism in college, economists are some of the most brainwashed people on the planet.
    If capitalism worked as its’ theoretical design, working men would not be enslaved to banks for a lifetime and would actually have the chance to prosper, and the top 2% would not be in control of 95% or more of the money.

    Trickle down economics is one of the greatest scams perpetrated on the public of all history. It is in reality trickle up poverty. In reality, the poor spending money is what feeds the economy.
    Money put into the hands of those who are already richer than God weakens the economy, because those who already have far more than any 100 families could ever use do not spend money, they hoard it.

    But you pour money into the poor, and what do they do? The SPEND it. And the places where they spend it must hire more help and restock their inventory. And of course when they do that, more people go back to work which means more people are spending money. That is what stimulates economies.

    But the corporations/politicians do not want a stimulated economy that frees up disposable income for the slaves. They want a stifled economy in which people are chained to it as if they were chained to a lead ball.

    Because those who are free of the economy have time to grow their own food and cattle, they have a place to do it. They have time to find ways to supply their own energy instead of being forced to obtain it at high prices from corporations. They find time to be self sufficient. Which capitalism does not want.

    Jan 23, 2019, 12:49 pm 0 Reply
• Rockledge

  In the past the republican party has been known for running up massive deficits ( while at the same time bribing the voters with bogus “tax breaks” and rebates).
  The democrats are the so called “tax and spend” party, and the republicans are the “borrow and piss away” party.
  Up until Obama Democrat presidents typically tightened the governments belt and raised taxes in order to pay of the debts of the previous WhoreHouse occupant, for example President Clinton paid down reagans enormouse debt.
  Then of course the cheney clan gave us pittance tax rebates while running up massive debt and putting us in debt to China, of all places to owe.
  Sadly, Obama continued the cheney administrations economy and drove up the deficits even more.

  President Trump is doing almost identical what reagan did. Reagans economic policies gave us a massive debt as well as a back breaking depression ( that they called a “recession” in order to avoid calling it what it is).

  If going back to reaganomics and sending the country into bankruptcy is what it will take to get our borders secure, it will be worth it. Mostly because the immense cost of us providing for the criminal invaders and having them send americas wealth out of the country is destroying our economy, and none of our problems can be solved until we have borders again.

  But going back to the reagan depression is a frightening outlook for the working man. Who never recovered from the 80s depression, and only recouped a small amount during the economic boom of the mid and late 90s.

  Still, it is the price we have to pay if we want america to ever become America again, and never want to see it become allahland. Which is where we are headed otherwise.

  Jan 23, 2019, 12:34 pm 0 Reply

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