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As stimulus begins wind-down, U.S. still holding its own… debt

June 19, 2013

The U.S. government owes most of its $16 trillion debt to itself, and the Fed has been buying $85 billion more each month. But there are also big IOU’s to China and Japan.

The Federal Reserve has been looking at the progress of the US economic recovery and may begin to end stimulus programs if progress remains steady. That includes eventually winding down the amount of debt it purchases from the Treasury - currently $85 billion a month in long-term bonds - though purchases will continue for the time being. That's a lot of debt we're selling - to ourselves. 

As of June 2013, the federal government’s outstanding debt surpassed $16 trillion. Who are the nation’s creditors? The government owes the most money to — itself.  U.S. government agencies, including giant trust funds of the Social Security and Medicare systems, and the independent Federal Reserve System account for 41 percent of the federal debt, more than $2 of every $5.

We're not the only ones buying, though. Nearly one-third of the national debt is owed to other countries. China is the biggest foreign creditor ($1.144 trillion), followed by Japan ($1.076 trillion), but together they own less than 15 percent of it. Mexico and Canada together are owed $90 billion.

Take a look at one of our old infographics (produced prior to the debt reaching $16 trillion) to see who we owe what to, and how much we're holding on to internally. Then join in on the comments below - if we're going to hold debt, should we hold it ourselves?