Unexpectedly Intriguing!
19 October 2022

Do you remember 2021? Let's take a moment for a recap. When Joe Biden was sworn in as President of the United States on 20 January 2021, the U.S. national debt stood at $27.76 trillion. Just over eight months later, at the end of the U.S. government's 2021 fiscal year, the U.S. government's total public debt outstanding had risen to $28.43 trillion.

And now, one year after that, the U.S. national debt has risen to $30.93 trillion through the end of the U.S. government's 2022 fiscal year. That's an increase of $2.5 trillion over the past year and an increase of $3.17 trillion during President Biden's tenure in office.

To whom does the U.S. government owe all that money?

The following chart illustrates who the U.S. government's biggest creditors are as of the end of the U.S. government's 2022 fiscal year along with the portion of the national debt they are owed.

To Whom Does the U.S. Government Owe Money? September 2022 First Estimate

The Overall Picture

The U.S. Federal Reserve is once again Uncle Sam's single largest creditor, accounting for 18.3% of the entire U.S. government's national debt. The Fed's share of the total public debt outstanding has decreased from 19.1% a year ago, mainly as the Federal Reserve has all but stopped underwriting the U.S. government's new spending. Instead, since March 2022, the Federal Reserve has been hiking interest rates in a campaign to slow the rise of inflation that was unleashed by President Biden's spending.

With the Fed having raised interest rates above the near-zero level they were at when President Biden was sworn into office, U.S. individuals and institutions (banks, insurance companies, pension funds, etc.) have picked up most of the slack now that loaning money to Uncle Sam has become more worthwhile with higher interest rates. The share owned by this category of major national debt holders has increased from 37.7% to 42.1%.

Meanwhile, the share of the U.S. government's national debt owed to Social Security has continued falling from 9.2% to 8.9%. That's because Social Security has been running in the red since 2009, forcing its Old Age and Survivors' Insurance Trust Fund to sell off U.S. treasuries it accumulated when it was operating in the black so it can keep paying out benefits at promised levels. Social Security's share of the U.S. national debt is projected to decline to 0% in 2034. After that happens, Social Security benefits will be reduced by somewhere between 20-25% as promised under current law.

The retirement trust funds for the U.S. government's military and civilian employees together account for 6.6% of the total U.S. national debt, down from 7.1% in 2021.

Foreign entities collectively hold 24.3% of the total debt liabilities issued by the U.S. government, down from the share of 26.6% they held at the end of the U.S. government's 2021 fiscal year. Of the portion of the national debt owed to foreign-based institutions, Japan continues to hold the greatest share at 3.9% of the U.S. national debt based on preliminary estimates, down from its 2021 share of 4.6%. China comes in second holding a share of 3.8%, falling from a share of 4.6% in 2021. Both countries have been selling off their holdings of U.S. government-issued debt securities to keep their currencies from losing too much value with respect to the U.S. dollar.

The international banking centers of Belgium, Ireland, and Luxembourg saw their share of the U.S. government's total public debt outstanding dip from 3.0% to 2.8%, while the United Kingdom saw its share slightly rise from 2.0% to 2.1%. Brazil and the remaining foreign nations saw their shares of the U.S. national debt dip year over year.

The following waterfall chart breaks down where most the money the U.S. government newly borrowed during its 2022 fiscal year came from:

Net Changes in Holdings of U.S. National Debt, FY 2022: 30 September 2021 through 30 September 2022

About the Data

These figures represent the most current information available as of 18 October 2022, which for the total public debt outstanding is fully current through 30 September 2022. The Federal Reserve's holdings is current through 28 September 2022, data on U.S. government entity holdings is current through September 2022, and data for foreign holdings is based on estimates through August 2022 that were released on 18 October 2022.


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