Who does the US owe money to? 2020 update I Up to Us (2024)

FAQs

Who does the US owe money to? 2020 update I Up to Us? ›

The public owes 74 percent of the current federal debt. Intragovernmental debt accounts for 26 percent or $5.9 trillion. The public includes foreign investors and foreign governments. These two groups account for 30 percent of the debt.

As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Including both private and public debt holders, the top three December 2020 national holders of American public debt are Japan ($1.2 trillion or 17.7%), China ($1.1 trillion or 15.2%), and the United Kingdom ($0.4 trillion or 6.2%).

China's outstanding foreign debt, including US dollar debt, reached US$2.29 trillion at the end of September in 2020, up from US$2.13 trillion at the end of June, according to China's State Administration of Foreign Exchange.

Japan is the second-largest foreign holder of U. S. debt after China, with holdings totaling nearly $1. 3 trillion in September 2020. Japan's large holdings of U. S. debt can be attributed to Japan's large trade surplus, low-interest rates, and limited investment opportunities in their own domestic markets.

The goal was to allow the U.S. government to fund itself, particularly in times of great need, without having to repeatedly go back to Congress for permission. But as the debt has risen in all but a few years since World War II, Congress has had to approve a debt limit increase 102 times.

Overall, foreign countries each make up a relatively small proportion of U.S. debt-holders. Although China's holdings have represented just under 20 percent of foreign-owned U.S. debt in the past several years, this percentage only comprises between 5 and 7 percent of total U.S. debt.

At the end of 2021, of the 98 countries for whom data was available, Pakistan ($27.4 billion of external debt to China), Angola (22.0 billion), Ethiopia (7.4 billion), Kenya (7.4 billion) and Sri Lanka (7.2 billion) held the biggest debts to China.

The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government. Offered in a wide range of maturities.

Is China in a debt crisis? ›

China's debt is nearly 44% of its GDP and its local governments owe nearly $5.14 trillion. With the economic slowdown and collapse of land sales revenue, provinces and local governments in China are facing an embarrassing situation.

As a result, the U.S. actually did become debt free, for the first and only time, at the beginning of 1835 and stayed that way until 1837. It remains the only time that a major country was without debt. Jackson and his followers believed that freedom from debt was the linchpin in establishing a free republic.

3. The United Kingdom. British investors increased their holdings of U.S. debt to $645.8 billion as of November 2022.

Japan - Debt: 221.32% of GDP

Japan's debt-to-GDP ratio is the highest in the world due to a prolonged period of economic stagnation and demographic challenges.

By contrast, Alaska and Wyoming had the lowest levels of state government debt at just under $5 billion each. This can be attributed to their relatively diverse sources of income such as energy revenues, mineral royalties and taxes.

In a default, interest rates on U.S. treasuries would skyrocket (because investors would demand a higher rate in exchange for taking the risk that they might not be paid back), and treasuries might no longer be usable as collateral (because their underlying value would not be clear).

The best example can be taken from Hong Kong (it is a one of the debt free countries), whose economy has the least debt to GDP ratio. It is an almost debt free country. It has a well-regulated financial system and large foreign reserves.

Why does the US borrow money from China? ›

Chinese loans to the U.S., through the purchase of U.S. debt, enable the U.S. to buy Chinese products. It's a win-win situation for both nations, with both benefiting mutually. China gets a huge market for its products, and the U.S. benefits from the economical prices of Chinese goods.

The Fed tries to influence the supply of money in the economy to promote noninflationary growth. Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse.

The government would no longer be able to pay the salaries of federal and military employees, or pensions. National parks and other agencies would shut down, while companies and charities that count on government funds would be in peril.

If the debt ceiling binds, and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession.

Is Bank of America Partly Owned by China? No, Bank of America is not partly owned by China. It is an American bank.

China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. Of that, 195,000 acres, worth almost $2 billion when purchased, are owned by 85 Chinese investors, which could be individuals, companies or the government.

United States - Federal Government; Net Worth (IMA), Level was -20997153.00000 Mil.

Overall, Chinese government debt is now equivalent to 102% of its GDP, the analysts estimated. That debt ratio is still lower than America's, which is currently about 122%, based on its national debt and GDP in 2022, but China's has grown at a staggering rate, more than doubling from 47% in 2016.

The United States is the richest country in the world with the highest GDP, as of 2021. China is the second richest country in the world with a $17.734 trillion GDP.

Both are owned by Beijing-based parent company ByteDance, but Douyin launched before TikTok and became a viral sensation in China. Its powerful algorithm became the foundation for TikTok and is key to its global success.

When did the US start borrowing money? ›

1776: The Birth of Public Debt

In 1776, a committee of ten founders took charge of what would become the Treasury, and they helped secure funding for the war through "loan certificates" (equivalent to bonds) with which they borrowed money for the fledgling government from France and the Netherlands.

Individuals, organizations, fiduciaries, and corporate investors may buy Treasury securities through a bank, broker, or dealer. With a bank, broker, or dealer, you may bid for Treasury marketable securities non-competitively or competitively, but not both, for the same auction.

The British economy had been heavily geared towards war production (constituting 55% of GDP in 1944) and had drastically reduced its exports. The UK therefore relied on Lend-Lease imports to obtain essential consumer commodities such as food while it could no longer afford to pay for these items using export profits.

China's debt has risen dramatically in the past decade, largely the result of credit fed to state-owned enterprises in the wake of the global financial crisis.

China has little overseas debt, and a high national savings rate. In addition, most of the debt is state owned – state-controlled banks loaned funds to state-controlled firms – giving the government the ability to manage the situation.

The $300 trillion works out to $37,500 of debt for every person in the world, compared to a GDP per capita of just $12,000. Global governments, households, financial corporates and nonfinancial corporates owe a record $300 trillion as of June 2022.

In modern history, the U.S. has never defaulted on its debt. The debt ceiling is the self-imposed limit on how much debt Congress allows the federal government to have. If Congress does not raise or suspend the debt ceiling, the U.S. could default on its debt, which would also impact financial markets and the economy.

The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone. Decreases in federal revenue are largely due to either a decrease in tax rates or individuals or corporations making less money.

The Government Has Borrowed $1.7 Trillion From The Social Security Trust Fund. The government has borrowed the total value of the Trust Fund to pay for other government spending.

First, as discussed by authors such as Hall and Sargent (2011) and Eichengreen and Esteves (2022), the U.S. actually paid off part of the World War II debt by running primary surpluses—by levying taxes in excess of current government spending—over much of the period when the debt/GDP ratio was falling.

Does US owe money to India? ›

The US, the world's largest economy, owes India USD 216 billion in loan as the country's debt grows to a record USD 29 trillion, an American lawmaker has said, cautioning the leadership against galloping foreign debt, the largest of which comes from China and Japan.

Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.

International Monetary Fund data show China's explicit local government debt nearly doubled over five years to the equivalent of $5.14 trillion — or 35.34 trillion yuan — last year.

If the government has poor rating and is already in high debt then the foreign countries will charge higher interest rate on the borrowed loans. When countries are unable to pay back on their loans to their creditors then they declare bankruptcy and are then considered defaulted.

As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

Budget deficits and increasing debt have become serious fiscal challenges facing the federal and many provincial governments recently. Since 2007/08, combined federal and provincial net debt (inflation-adjusted) has roughly doubled from $1.1 trillion to a projected $2.1 trillion in 2022/23.

This chart shows the U.S. cities with the highest municipal debts per taxpayer (in U.S. dollars). New York City has the biggest deficit out of the 75 most populous cities in the U.S., put at a whopping $171.5 billion in 2021 by the organization.

Fewer than one quarter of American households live debt-free. Learning ways to tackle debt can help you get a handle on your finances.

The average new account balance for unsecured personal loans, or loans taken without collateral such as for a car or home, is $7,978, according to November 2022 data from TransUnion. Americans with a personal loan have an average balance of $11,131, up from $10,987 in 2021.

Who does China borrow money from? ›

At the end of 2021, of the 98 countries for whom data was available, Pakistan ($27.4 billion of external debt to China), Angola (22.0 billion), Ethiopia (7.4 billion), Kenya (7.4 billion) and Sri Lanka (7.2 billion) held the biggest debts to China.

Given that Denmark is ranked the country with the highest household debt,¹ it comes as no surprise that Denmark's capital, Copenhagen, was listed as the 25th most expensive city to live in, in 2020.³ Switzerland's capital, Zurich, ranks as the fourth-most expensive city to live in against 209 others,³ and it's also ...

The PIIGS countries—or Portugal, Italy, Ireland, Greece and Spain—are on everyone's watch list as being the most in the risk of sovereign default. And yes, some of them have been in some pretty hot financial water in the last decade.

These are the issues on the table as negotiations start between Congress and the White House on raising the legally mandated limit on government borrowing, known as the debt ceiling. Currently the ceiling is set at $31.4 trillion.

For the past 20 years, Japan and China have been the top two foreign countries with US Treasuries. According to usafacts.org, as of January 2023, Japan owned $1.1 trillion in US Treasuries, making it the largest foreign holder of the national debt.

United States. The United States boasts both the world's biggest national debt in terms of dollar amount and its largest economy, which resolves to a debt-to GDP ratio of approximately 128.13%. The United States' government's spending exceeds its income most years, and the US has not had a budget surplus since 2001.

By contrast, Alaska and Wyoming had the lowest levels of state government debt at just under $5 billion each. This can be attributed to their relatively diverse sources of income such as energy revenues, mineral royalties and taxes.

Former Société Générale rogue trader Jérôme Kerviel owes the bank $6.3 billion. Here's what his case tells us about financial reform.

If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive.

As of July 2020, Japan overtook China and became the largest foreign debt collector for the U.S. The United States currently owes Japan about $1.2 trillion according to the U.S. Treasury report.

Which country has no debt? ›

The government would likely run out of money to pay most of its bills. It would not be able to borrow money to pay for Social Security, issue tax refunds or pay the salaries for federal workers and members of the military. The stock market would likely plummet.

What would happen if the debt limit isn't raised? If the government can't borrow to help pay for all of its bills that come due, it would have to suspend certain pension payments, withhold or cut the pay of soldiers and federal workers, or delay interest payments, which would constitute default.

For several years, the nation's debt has been bigger than its gross domestic product, which was $26.13 trillion in the fourth quarter of 2022.

The US owes so much money to China because of the large trade and investment deficit the US currently has with China. This deficit is the result of a combination of factors, including rising wages and technology costs in the US, slow growth in the US economy, and US policies that favor the import of goods from China.

For the past 20 years, Japan and China have been the top two foreign countries with US Treasuries. According to usafacts.org, as of January 2023, Japan owned $1.1 trillion in US Treasuries, making it the largest foreign holder of the national debt.

A short breach

“Interest rates for Treasury bills and bonds will go up and that will ultimately lead to a bigger tax burden for Americans.” It could also fuel calls for alternatives to the US dollar, which for decades has been the unparalleled currency in international finance.

Since the U.S. dollar has a variable exchange rate, however, any sale by any nation holding huge U.S. debt or dollar reserves will trigger the adjustment of the trade balance at the international level. The offloaded U.S. reserves by China will either end up with another nation or will return back to the U.S.

China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. Of that, 195,000 acres, worth almost $2 billion when purchased, are owned by 85 Chinese investors, which could be individuals, companies or the government.