Sunday, October 13, 2013
Who Owns the $16.8 Trillion in US Debt?
Contrary to popular opinion, the US is not bought and paid for by China. In fact, most of US debt is owned by entities and people inside the the US. We owe about $5 trillion to other countries. The largest single owner of US debt is the US government itself through the QE program of the Federal Reserve, the investment restrictions of the Social Security Administration, and military and federal retirement programs. It is a boatload of debt, to be sure, and slightly exceeds the 2012 estimate of $16.62 trillion in US GDP. One thing the government shutdown has demonstrated (even though approximately 80% of the government is still working) is that there is plenty of bloat and waste in the bureaucracy to be cut, but few politicians with the fortitude to do what is best for the country in either party. Entitlement programs are a time bomb waiting to make the debt problem much worse without significant reform.