Who holds U.S. debt?
The United States is one of the biggest lenders in the world, yet it holds one of the greatest debts. By the close of 2023, the U.S. national debt had reached $34.4 trillion, with various entities holding portions of this debt.
According to the U.S. Treasury and the Peter G. Peterson Foundation, the debt is divided into two main categories: debt held by the public (domestic and foreign holders) and intragovernmental debt.
Debt held by the public
Debt held by the public includes Treasury securities such as bonds, bills, and notes that are sold to investors outside the federal government. This category is significant because it reflects the amount borrowed from external lenders to support government activities. As of the end of 2023, approximately $27 trillion, or 79% of the total national debt, was held by the public.
Domestic holders:
- Federal Reserve System is the largest domestic holder, owning about a third ($5.2 trillion) of the domestically held debt.
- Mutual Funds, Depository Institutions, State and Local Governments, Pension Funds, and Insurance Companies: These entities collectively hold 25% of the debt totalling $8.5 trillion.
Foreign holders:
- Japan and China: Japan is the largest foreign holder, with $1.1 trillion in U.S. Treasurys, followed by China with $816 billion.
- Other countries: The United Kingdom, Luxembourg, and Canada are also significant holders, with various other countries collectively holding billions in U.S. debt.
Intragovernmental debt
Intragovernmental debt represents the amount owed by the federal government to its programmes, such as Social Security and Medicare. This type of debt accounts for about $7 trillion, or 20% of the total national debt. It is essentially a record of transactions between different parts of the federal government and is not traded on the open market.
