To whom? When did we start keeping track? What does it practically mean as I image it will never be paid back?
In: Economics
Have you ever bought a US savings bond? That’s government debt.
The government sells a few different kinds of things that essentially mean “Give us this much money now and we’ll give you back this much more later”.
The amount more is the interest.
People and institutions buy these promises and get paid back with interest.
Now who holds these promises? Mostly Americans and American institutions. About 2/3 of US debt is held in the US. A lot of it is held by other parts of government or other kinds of government. US debt is very low risk compared to things like the stock market. When cities or states or parts of the federal government have a lot of money they aren’t spending right away, they can’t just hold the cash. That would keep losing value from inflation. But they can’t gamble on the stock market. So they buy some US debt which is pretty much the safest way to grow money. It doesn’t grow much, but there’s a very low risk they’ll lose it all like money in stocks might.
Retirement and pension funds hold a lot of government debt too. So do banks.
So when we pay this debt back, or pay interest on it, that money circulates back around the US, to other parts of government, to people’s retirements, to banks and to individuals who want to hold some money in a boring place that grows a little.
The 1/3 that’s left is held outside the US. Japan, China, the UK and Luxembourg together have most of that debt.
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