A large part (almost one third) of our federal government debt is owed to ourselves! The Social Security Trust Fund is one of them. Social Security for decades was a system that raised enough money to pay its bills. Recognizing that there were going to be less people paying into it than it needed to spend, the government raised the taxes on Social Security and put the “extra” amount collected into savings. Of course our politicians are thieves, so they “stole” the money to spend right away and issued the Social Security folks treasury bonds. So a lot of our debt is money that we already were taxed on.
Some of the other debt is money that we spent from other appropriations. We “charge” our government agencies for their future pension plans. Of course charging them means we appropriate money to them for this bill.
Then the government takes the money that they appropriate them back and gives them treasury bonds to account for the money. So now the government gets to spend the money twice, once on what they were supposed to, and once on what they wanted to. Imagine paying your house payment. You send the bank $1000. Then you take it back from them and give them an IOU. You spend the $1000 on a vacation. On paper, you spent $2000. In reality you spent the same money twice and incurred more debt.
Who are these agencies that we owe money to as part of the debt?
So, who owns the remaining $14.4 trillion of our debt?
So, which countries own the most US debt? A popular notion is that China owns the most and uses the threat of selling the debt to influence our policies. China does own the most of the foreign countries that own our debt, but it’s only $1.2 trillion. Seeing as we import $15.9 trillion dollars of goods and services from them, they obviously need us more than we need them.
The foreign owners of our debt own about 30% of our debt. China and Japan are number one and two at $1.2 and $1.1 trillion respectively. The remainder are all in the low billions.
So, $14 trillion of our debt is owned by the US Government, the Federal Reserve, and some Foreign Countries. The remainder is owned by private and public (states, not federal) pension plans, savings bonds and the like.
Part 3 will analyze where our money comes from and where it goes.
Only a smiling visitant here to share the love (:, btw outstanding layout. “Make the most of your regrets… . To regret deeply is to live afresh.” by Henry David Thoreau.