The U.S. national debt is a truly large number. With the nation's total public debt outstanding of $35,464,673,929,171.69 as of the end of its fiscal year on 30 September 2024, the U.S. government is truly indebted to its major creditors.
During FY 2024, the U.S. national debt increased by $2.3 billion, or 6.9%, to reach that number. The national debt at the end of FY 2023 was just $33.167 trillion.
So to whom does the U.S. government owe $35.465 trillion?
The following chart provides a first estimate of who the U.S. government's biggest creditors are at the end of its 2024 fiscal year, along with the portion of the national debt they are owed.
It will be months before all the numbers for 2024 are finalized. This chart presents a first estimate of who owns the U.S. national debt, which should be within a few tenths of a percent for most of the major holders of debt securities issued by the U.S. government.
The Overall Picture
The U.S. Federal Reserve is once again the U.S. government's single largest creditor holding U.S. government-issued debt securities worth 12.4% of the U.S. government's entire total public debt outstanding. However, its share of the national debt is down from the 18.3% it held in 2022 and the 15% recorded last year as the Federal Reserve has continued reducing its holdings. In doing so, the Fed is still following the monetary policy of shrinking its balance sheet that it initiated in March 2022 when it began hiking interest rates to combat inflation unleashed by President Biden's policies.
Speaking of interest rates, on 19 September 2024, the Federal Reserve initiated a new series of interest rate reductions after holding them steady at an elevated level for over a year. Those higher rates have attracted U.S. individuals and institutions such as banks, insurance companies, investment funds, corporations, and individuals to collectively increase their share of the national debt from 47.1% in 2023 to 48.8% in 2024.
Social Security's share of the national debt plunged from 8.1% in 2023 to 7.3% in 2024. This decline coincides with the ongoing depletion of its Old Age and Survivors Insurance trust fund, which has run in the red in every year since 2009.
The combined share of the U.S. national debt held by the government's military (4.5%) and civilian (3.0%) employee retirement trust funds swelled from 7.2% to 7.5% from FY 2023 to FY 2024.
Altogether, the portion of the U.S. national debt held by U.S. entities in 2024 is 76.0%, a small dip from the 77.4% in 2023, but up slightly from 75.7% share in 2022.
Foreign Holdings
The portion of the U.S. total public debt outstanding held by foreign individuals and institutions is 24.0%. While this is not the largest percentage of the national debt that foreigners have ever held, the amount of their holdings is at a record level. Reuters describes the mid-2024 surge in those holdings:
Foreign holdings of U.S. Treasuries surged to a record high in August, data from the Treasury Department showed on Thursday, rising for four straight months.
Holdings of U.S. Treasuries by foreigners rose to $8.503 trillion in August, up from $8.338 trillion in the previous month. They were up 11.5% from holdings a year earlier.
And yet the share of the national debt held by Japan and China, the two largest foreign holders of U.S. government-issued debt securities, declined. Japan's share fell from 3.3% to 3.2% from 2023 to 2024. China and Hong Kong's combined share likewise dipped from 2.9% to 2.8%.
In fact, most of the increase in foreign holdings was driven by nations with a much smaller share of the U.S. national debt, with the category in which we group "all other foreign nations" rising from 11.7% in 2023 to 12.9% in 2024.
About the Data
The U.S. government's total public debt outstanding is the value recorded for 30 September 2024, the final day of the government's 2024 fiscal year, which also applies for the portion of the national debt held by the government-operated trust funds for Social Security, military and civilian government employees. Data for foreign holdings is based on estimates through August 2024 that was released on 17 October 2024. The Federal Reserve's holdings are those recorded on 25 September 2024.
Labels: national debt
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