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October 24, 2017

The U.S. government's 2017 fiscal year officially ended on 30 September 2017. From the end of its 2016 fiscal year (FY2016) a year earlier, the total public debt outstanding of the U.S. government increased by $671.5 billion, rising from $19,573 billion (or $19.6 trillion) to $20,245 billion (or $20.2 trillion) during FY2017.

The following chart shows the major breakdown of who the U.S. government has borrowed that total $20.2 trillion from:

FY 2017 (Preliminary): To Whom Does the U.S. Government Owe Money?

According to the U.S. Treasury Department, the U.S. government spent some $665.7 billion more than it collected in taxes during its 2017 fiscal year. The difference between this figure and the $671.5 billion that the total national debt actually rose can be attributed to the government's net borrowing to fund things like Federal Direct Student Loans, which collectively account for nearly $1.1 trillion of the government's $20.2 trillion debt, or 5.4% of the total public debt outstanding.

Put differently, the U.S. national debt would be 5.4% less at roughly $19.1 trillion if not for the federal government's takeover of the student loan industry from the private sector in March 2010. Since that time, approximately $1 of every $10 that the U.S. government has borrowed has been for the purpose of funding its student loan program.

Overall, 69% of the U.S. government's total public debt outstanding is held by U.S. individuals and institutions, while 31% is held by foreign entities. China has resumed its position as the top foreign holder of U.S. government-issued debt, with directly accounting for 6.9% between institutions on the Chinese mainland and Hong Kong.

Beyond that, China likely has additional holdings that are currently being shown as being held in the international banking centers of Belgium and Ireland, which together account for 2.0% of the U.S. national debt, where China's holdings are believed to represent a significant portion of the amounts currently being credited to both these nations.

The largest single institution holding U.S. government-issued debt is Social Security's Old Age and Survivors Insurance Trust Fund, which is considered to be an "Intragovernmental" holder of the U.S. national debt, and which holds 13.9% of the nation's total public debt outstanding. The share of the national debt held by Social Security's main trust fund is expected to fall as that government agency cashes out its holdings to pay promised levels of Social Security benefits, where its account is expected to be fully depleted in just 17 years. Under current law, after Social Security's trust fund runs out of money in 2034, all Social Security benefits would be reduced by 23% according to the agency's projections.

The largest "private" institution that has loaned money to the U.S. government is the U.S. Federal Reserve, which accounts for nearly one out of every eight dollars borrowed by the U.S. government. It lent nearly all of that total since 2008, mainly through the various quantitative easing programs it operated from 2009 through 2015 in its attempt to stimulate the U.S. economy enough to keep it from falling back into recession. In September 2017, the Fed announced that it would begin reducing its holdings of U.S. government-issued debt.

Data Sources

U.S. Treasury. The Debt To the Penny and Who Holds It. [Online Application]. 30 September 2017.

Federal Reserve Statistical Release. H.4.1. Factors Affecting Reserve Balances. Release Date: 28 September 2017. [Online Document].

U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 21 October 2017.

U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2017 Through September 30, 2017. [PDF Document].

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