It\u2019s well known that the United States relies on foreign buyers to purchase much of the government debt used to fund the ongoing deficit. But has the composition of the debt buyers changed recently? N.C. State University economist Mike Walden responds.<\/p>\n
\u201cIt really has …. Of course, China has been a big buyer of our debt in recent years. And China announced about a year ago that they wanted to diversify — they wanted to go buy other things. That caused a lot of hand-wringing and, well, gosh, if China doesn\u2019t buy our debt, who is? And what\u2019s that going to mean for interest rates et cetera<\/em>?<\/p>\n \u201cAt the same time …, we saw our Federal Reserve, which has also been a big buyer of our debt, pull back. So, we\u2019ve had a big test over the last year of if the two biggest buyers of our debt — China and the Federal Reserve — didn\u2019t buy that debt, what would happen?<\/p>\n \u201cWell, what happened is another buyer stepped in. What we\u2019ve seen in the data is Japan has now moved in. They have been the biggest buyer of our debt in the last year. And as a result the federal government has been able to issue debt. It\u2019s been able to sell it (without) not much consequence on interest rates.<\/p>\n \u201cAnd I think the reason here is despite all of our fiscal issues, federal government debt — U.S. federal government debt — worldwide is still viewed as a very safe investment, and so someone, again in this case Japan, has stepped up to the plate.\u201d<\/p>\n","protected":false,"raw":"It\u2019s well known that the United States relies on foreign buyers to purchase much of the government debt used to fund the ongoing deficit. But has the composition of the debt buyers changed recently? N.C. State University economist Mike Walden responds.\n\n\u201cIt really has .... Of course, China has been a big buyer of our debt in recent years. And China announced about a year ago that they wanted to diversify -- they wanted to go buy other things. That caused a lot of hand-wringing and, well, gosh, if China doesn\u2019t buy our debt, who is? And what\u2019s that going to mean for interest rates et cetera<\/em>?\n\n\u201cAt the same time ..., we saw our Federal Reserve, which has also been a big buyer of our debt, pull back. So, we\u2019ve had a big test over the last year of if the two biggest buyers of our debt -- China and the Federal Reserve -- didn\u2019t buy that debt, what would happen?\n\n\u201cWell, what happened is another buyer stepped in. What we\u2019ve seen in the data is Japan has now moved in. They have been the biggest buyer of our debt in the last year. And as a result the federal government has been able to issue debt. It\u2019s been able to sell it (without) not much consequence on interest rates.\n\n\u201cAnd I think the reason here is despite all of our fiscal issues, federal government debt -- U.S. federal government debt -- worldwide is still viewed as a very safe investment, and so someone, again in this case Japan, has stepped up to the plate.\u201d"},"excerpt":{"rendered":" It\u2019s well known that the United States relies on foreign buyers to purchase much of the government debt used to fund the ongoing deficit. But has the composition of the debt buyers changed recently? N.C. State University economist Mike Walden responds.<\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"source":"","ncst_custom_author":"","ncst_show_custom_author":false,"ncst_dynamicHeaderBlockName":"","ncst_dynamicHeaderData":"","ncst_content_audit_freq":"","ncst_content_audit_date":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[59],"tags":[],"_ncst_magazine_issue":[],"coauthors":[],"class_list":["post-19217","post","type-post","status-publish","format-standard","hentry","category-economic-perspective"],"displayCategory":null,"acf":[],"_links":{"self":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts\/19217"}],"collection":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/comments?post=19217"}],"version-history":[{"count":0,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts\/19217\/revisions"}],"wp:attachment":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/media?parent=19217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/categories?post=19217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/tags?post=19217"},{"taxonomy":"_ncst_magazine_issue","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/_ncst_magazine_issue?post=19217"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/coauthors?post=19217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}