Posted by With the United States government deadlocked in talks with the opposition over raising the debt ceiling; it is time to take a look at the US debt issue.
Like all governments, the United States borrows hard cash through treasury bonds. It issues government securities that other countries and institutions buy.
The US national debt — almost $14.35 trillion — is owned mostly in the United States, and the $4.5 trillion foreign-owned debt is owned predominantly by Asian economies, according to Guardian and Business Insider.
First let us take a look how much debt America owes…
(US national debt is owned mostly in the US)
Social security trust fund
Total holdings of US Treasuries: $2.67 trillion
Percentage of US debt that they own: 19
The Federal Reserve
The Treasury owes the Fed $1.63 trillion in Treasuries, much of which were bought for the Quantitative Easing programmes.
That is 11.3 per cent of US debt, much more than China.
China
Total holdings of Treasuries: $1.16 trillion
Percentage of US debt that they own: 8
US households
Total holdings of US Treasuries: $959.4 billion
Percentage of US debt that they own: 6.6
Japan
Total holdings of Treasuries: $912.4 billion
Percentage of US debt that they own: 6.4
State and local governments
Total holdings of US Treasuries: $506.1 billion
Percentage of US debt that they own: 3.5
Private pension funds
Total holdings of US Treasuries: $504.7 billion
Percentage of US debt that they own: 3.5
United Kingdom
Total holdings of Treasuries: $346.5 billion
Percentage of US debt that they own: 2.4
Money market mutual funds
Total holdings of US Treasuries: $337.7 billion
Percentage of US debt that they own: 2.4
State, local and federal retirement funds
Total holdings of US Treasuries: $320.9 billion
Percentage of US debt that they own: 2.2
Commercial banks
Total holdings of US Treasuries: $301.8 billion
Percentage of US debt that they own: 2.1
Mutual funds
Total holdings of US Treasuries: $300.5 billion
Percentage of US debt that they own: 2
Oil exporting countries
Total holdings of Treasuries: $229.8 billion
Percentage of US debt that they own: 1.6
Brazil
Total holdings of Treasuries: $211.4 billion
Percentage of US debt that they own: 1.5
Taiwan
Total holdings of US Treasuries: $153.4 billion
Percentage of US debt that they own: 1.1
Caribbean banking centres
Total holdings of US Treasuries: $148.3 billion
Percentage of US debt that they own: 1
[...] this time would be much, much, worse. Money market funds currently hold $301 billion in US debt, which represents about 11% of total money market fund assets. Since the SEC mandates [...]
Problem is, that only adds up to 74.6%.