"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Who Owns America’s Debt? Hint: It’s Not China.

In Uncategorized on July 25, 2011 at 10:02 am

Oldspeak:”Howsabout them apples. Turns out foreign nations don’t own the majority of U.S. debt, Americans do. ‘America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.’ –Thomas Mucha. With the largest amount owed to…Wait for ittttt….. the Social Security Trust Fund! Yes, the big bad scary drain on the U.S. economy that according to politricians needs to be cut and privatized owns 19 percent of U.S. debt. Curious then isn’t it that Politricians want to cut payments to the entitlement program for elderly and disabled people the U.S. Government owes the most money to.  Puts the U.S. ‘Debt Talks’ Charade in a little different perspective don’t it? No mention of this in Corporate Media. O_0

By Thomas Mucha @ Global Post:
Truth is elusive.  But it’s a good thing we have math.

Our friends at Business Insider know this, and put those two principles to work today in this excellent and highly informative little slideshow, made even more timely by the ongoing talks in Washington, D.C. aimed at staving off a U.S. debt default.

Here’s the big idea:

Many people — politicians and pundits alike — prattle on that China and, to a lesser extent Japan, own most of America’s $14.3 trillion in government debt.

But there’s one little problem with that conventional wisdom: it’s just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it’s really Americans who hold most of America’s debt.

Here’s a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

  • The U.S. Treasury / Federal Reserve: $1.63 trillion (11.3 percent)
  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent)
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

For a smart take on how President Obama and House Republicans should end gridlock over debt and deficits, see our new GlobalPost series The Negotiator, which features Wharton’s negotiation guru Stuart Diamond.

And to bone up on China’s debt — another potentially big global economic headache — check out this interview with brainy-yet-coherent Northwestern University economist Victor Shih, who spoke with GlobalPost’s David Case.

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