Where does the US owe the most money?
In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.
In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.
Perhaps surprisingly, the countries to which the US is most in debt are Japan, which itself has significant debt, and China, which is often viewed as the United States' greatest economic competitor.
China is one of the United States's largest creditors, owning about $859.4 billion in U.S. debt.
The US Federal reserve works a bit differently but either way the debt is still there. Why does the US owe so much debt to Japan? Because this has been an industrial policy of Japan and America, to give Japan the access to US market, and Japan to actively encourage lower yen, so to export to US at cheaper price.
1) Switzerland
Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
China owes the United States $1.3 trillion, which is the most debt out of all the countries that are its debtors. Japan was the primary debt holder until 2008, but now comes in second place, with $1.2 trillion. Other countries with outstanding U.S. debt include Russia, India and South Korea.
Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.
What happens if China calls in U.S. debt?
The most immediate effect would be an increase in interest rates on Treasuries since selling so many at once would artificially depress their prices in the bond market; thus increasing their yields.
Years of elevated budget deficits, exacerbated by massive federal spending during the COVID-19 pandemic, have taken the debt to historic levels: totaling more than $26 trillion in 2023, U.S. federal government debt is now at its highest percentage of gross domestic product (GDP) since World War II.
Russia National Government Debt reached 287.8 USD bn in Jan 2024, compared with 285.4 USD bn in the previous month.
In December 2021, debt held by the public was estimated at 96.19% of GDP, and approximately 33% of this public debt was owned by foreigners (government and private).
Broadly speaking, U.S. debt is an in-demand asset. It is safe and convenient. As the world's reserve currency, the U.S. dollar is extensively used in international transactions. Trade goods are priced in dollars and due to its high demand, the dollar can easily be cashed in.
Rank | Country | U.S. Treasury Holdings |
---|---|---|
1 | 🇯🇵 Japan | $1,076B |
2 | 🇨🇳 China | $867B |
3 | 🇬🇧 United Kingdom | $655B |
4 | 🇧🇪 Belgium | $354B |
Luxembourg, whose financial sector makes up 25% of its GDP, is the world's richest country by GDP per capita. With a population of just 660,000, the country is also considered a tax haven, incentivizing foreign investment due to its favorable tax policies.
Rank & Country | GDP (USD billion) | GDP Per Capita (USD thousand) |
---|---|---|
#1 United States Of America (U.S.A) | 27,974 | 83.06 |
#2 China | 18,566 | 13.16 |
#3 Germany | 4,730 | 56.04 |
#4 Japan | 4,291 | 34.55 |
An Explainer. Just about every country has debt: governments take loans to pay for new roads and hospitals, to keep economies ticking over when recessions hit or tax revenues fall. Sometimes they borrow from countries, other times banks, or maybe asset managers—companies like those investing your pension dollars.
- EGYPT. North Africa's largest economy needs to repay some $100 billion of hard-currency debt over the next five years. ...
- ETHIOPIA. ...
- GHANA. ...
- KENYA. ...
- LEBANON. ...
- PAKISTAN. ...
- SRI LANKA. ...
- TUNISIA.
How much does the US have in money?
The financial position of the United States includes assets of at least $269 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP).
India takes the top spot. Its $39.7bn debt towards the WB recorded at the end of 2021 is double that of the next biggest debtor, Indonesia, with $19.6bn.
Differencing assets against liabilities, the total net U.S. wealth is $136.8 trillion, 76.7% of the total consolidated asset base of $178.4 trillion.
On January 8, 1835, President Andrew Jackson achieves his goal of entirely paying off the United States' national debt. It was the only time in U.S. history that the national debt stood at zero, and it precipitated one of the worst financial crises in American history.
The dollar is a global reserve currency and U.S. bonds are seen as one of the most stable investments on the planet. So if the U.S. cannot pay its creditors, interest rates on U.S. debt would go up, creating a cascade of higher interest rates. So mortgage rates, credit card rates, car loan rates.
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