Debts of the US Government

Debts Owed by the US Government VS Debts Owed to it

Written by Carly Hallman

Americans are bombarded – by the news and their government representatives – with the fact that foreign countries owe us a lot of money. We’re also told the reverse, too, which is that we owe foreign countries a lot of money. But do you know the real facts about who owes who, and how much? It might surprise you to know that America is owed a lot more money than it owes. Despite substantial debts that America owes to countries like China and Japan, they owe us money as well.

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Debts and Debtors of the US Government

To Which Countries Does the United States Owe Money? (Major foreign holders of U.S. treasury securities, in billions of dollars. Numbers current as of the end of December, 2016)
Country Name Value of Holdings (Billions of $)
Total 6,003.9
All Other (Place this on the United States itself) 482.5
Japan 1,090.8
Mainland China 1,058.4
Ireland 288.2
Cayman Islands 263.5
Brazil 259.2
Switzerland 229.3
Luxembourg 223.4
United Kingdom 217.1
Hong Kong 191.4
Taiwan 189.3
Belgium 120.4
India 118.2
Saudi Arabia 102.8
Singapore 102.2
South Korea 93.2
Russia 86.1
Canada 83.0
Germany 82.2
Thailand 66.0
Bermuda 64.0
France 60.8
United Arab Emirates 60.6
Turkey 59.1
Netherlands 57.4
Norway 52.5
Mexico 47.1
Italy 39.8
Sweden 38.7
Philippines 38.5
Spain 38.3
Australia 34.6
Poland 34.0
Israel 31.6
Which Countries Owe Money to the United States? (Value of U.S. holdings of foreign securities, in billions of dollars. Numbers current as of the end of December, 2015)
Country Name Value of U.S. Holdings (Billions of $)
Total 9,454.8
All Other (Place this on the United States itself) 612.4
United Kingdom 1,239.5
Cayman Islands 1,217.1
Japan 821.6
Canada 705.3
Ireland 498.3
France 473.6
Switzerland 419.7
Netherlands 404.1
Germany 377.8
Australia 296.0
Bermuda 216.6
South Korea 171.1
Mexico 147.6
Sweden 137.5
Hong Kong 136.0
India 130.0
Luxembourg 127.6
Brazil 116.2
Spain 115.2
Mainland China 107.7
Taiwan 107.7
Italy 106.5
Singapore 98.9
Jersey 92.4
Denmark 90.1
Israel 79.8
Curacao 70.1
Belgium 68.2
South Africa 62.9
British Virgin Islands 62.7
Norway 57.9
Indonesia 47.1
Russia 39.6

Sources:
https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticsec2.aspx
https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/fpis.aspx
http://ticdata.treasury.gov/Publish/shca2015_report.pdf
http://ticdata.treasury.gov/Publish/mfh.txt

It’s not just the amount of money that America owes that has her citizens so concerned, either. A big part of this discussion is who American owes money to. For a long time, the biggest holder of U.S. debt was China. But did you know that in late 2016, Japan overtook China as the biggest foreign holder of U.S. debt? Japan and China are, by far, the two biggest holders of U.S. debt – but the top five is filled with countries that you might not expect. How about Ireland, the Cayman Islands, and Brazil? Did you expect them to be substantial holders of U.S. debt?

Then there are the countries that owe America money. Even though Japan holds the biggest amount of U.S. debt, the U.S. is also owed a lot of money by them too. Debts and investments are reciprocal relationships. Debts are often created as a natural part of doing international business. So they aren’t always as big, bad, and scary as people make them out to be.

Still, speculative reports by the Congressional Budget Office in 2014 indicate that America needs to cut back its debts in general. In 2011, the CBO said that “The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying. Citizens will either have to pay more for their government, accept less in government services and benefits, or both.”

The United States has been in a form of public debt ever since its creation – it’s the debt as a percentage of GDP that worries economists. As for Mainland China’s ownership of public debt? Many economists dismiss concerns that are raised in that area. In fact, the Department of Defense agreed with this in 2012, when they made a report to analyze the national security risks that U.S. government debt held by China might raise. In that report, the Department of Defense wrote that “attempting to use U.S. Treasury securities as a coercive tool would have limited effect and likely would do more harm to China than to the United States.”

The situation is more complicated than you might expect – so we’ve taken the liberty of mapping out US foreign debts! Using this infographic, you can see which countries owe the U.S. money, which countries the U.S. owes money to, and the total amounts. We’ve also broken down the “difference between actors,” which represents the difference between how much America owes and how much it’s owed. Get the facts for yourself right here!


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