Friday, March 2, 2012

Who Owns Our Debt?

I am constantly surprised by how much of the political discussion in this country is based on beliefs that are simply and demonstrably factually wrong. As a social scientist, I find it inexplicable that no one makes much effort to fix this, not even politicians (I'm looking at you, Mr. President) whose political interests would be served by people knowing the facts.

Take America's national debt, for example. We've heard a lot about how it's all borrowed from China, and how at any time they could decide to stop lending us money and then where would we be?

So how much of our national debt would you guess that China owns? Thirty percent? Fifty? Seventy?

Here are some figures (Table OFS-2):

Total debt, June 2011, in billions:
  Owned by US govt.(incl. Fed. Reserve, Soc. Sec. Trust Fund)
       6,220     43.4%
  Privately held                                                                            
       8,123       56.6%
                       4,501      31.4%
                                     1,166        8.1 %

That's right, China owns 8 percent of our debt. Foreigners in total own just over thirty percent. And the U.S. government owns more than 40 percent.

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