The national debt is becoming a bigger and bigger issue. The debt represents money the U.S. government owes to someone. N.C. State University economist Mike Walden defines who “someone” is.
“Well … let’s look at the breakdown of our total national debt, which now stands at $14 trillion. Actually the biggest single holder of that national debt is Social Security, as well as assorted other government trust funds. They hold $4.5 trillion of that $14 trillion debt.
“The Federal Reserve, which is another part of the federal government, holds $1 trillion. So right there between Social Security, the Federal Reserve and some other government agencies, $5.5 trillion of the $14 trillion is actually held by the federal government itself.
“Now domestic private investors people like you and me, businesses that can buy federal debt, they old $4 trillion. The part that everyone seems to focus on is that held by foreign investors; that also amounts to $4 trillion. So $4 trillion out of the $14 trillion is held by foreign investors.
“And then a country that has had a lot of focus on it — China: Out of that $4 trillion held by foreign investors, China has about $1 trillion. Japan has about $900 billion. And then the U.K. is actually the third biggest holder, foreign holder, at $500 billion.
“So yes, foreign investors, do hold a lot of our debt, but they certainly do not hold a majority.”