Our national debt is a subject of great controversy and fuzzy facts on all sides. I’d like to address two claims: that the national debt is equal to $55 trillion dollars, and our national debt consists of loans from the Chinese who covertly own our economy.
Firstly, the 55 trillion figure is the total of all loans and credit of all sorts by all government bodies, financial institutions, businesses, and individuals. That money is owed by those who borrow, not by the nation as a whole, and so as a number it is not very important.
The really important figure is the debt owed by the Federal Government, which is considered the responsibility of the country as a whole. Currently, that’s running at roughly $12.738 trillion dollars and growing at a pace of 1.422 trillion dollars per year. That means that in a nation of 300 million each individual share of the debt is $41,222 plus future interest, plus an additional $4605 dollars of new debt per person per year.
And so the national debt for which we are held corporately responsible is $12.7 trillion, not $55 trillion. So the 55 trillion figure for our government debt is, as we’ve seen, a myth. And now we’ll look at the second part of that claim: that China holds our national debt.
Our national debt is 12,765 billions. As you can see here, those debt obligations are issued in the form of treasury securities, which are held by people in a variety of nations by a variety of people. Of the 12,765 billions of dollars, 4,470 are intragovernmental, that is, owed by one part of the government to the other. Therefore, of the 12,765 billion we owe, about two-thirds, 8,295 billion, are owed to sources outside of the U.S. government. Of those 8,295 billion, there are 4,589 billion held by American citizens. This leaves 3,706 billion in foreign debt. Of these 3,706 billion, about 889 billion are owed to China.
So China owns just under 7% of our national debt–the average American therefore owes a Chinese person somewhere about $2,871.
So yes, we do owe China a significant amount of money. But they don’t own us. They’re not oppressing us by pulling all our financial strings. Our problems are our own, caused by reckless spending, and not by anyone taking advantage of us.
Misconceptions of the day: our 55 trillion national debt is pretty much held by China
Our national debt is a subject of great controversy and fuzzy facts on all sides. I’d like to address two claims: that the national debt is equal to $55 trillion dollars, and our national debt consists of loans from the Chinese who covertly own our economy.
Firstly, the 55 trillion figure is the total of all loans and credit of all sorts by all government bodies, financial institutions, businesses, and individuals. That money is owed by those who borrow, not by the nation as a whole, and so as a number it is not very important.
The really important figure is the debt owed by the Federal Government, which is considered the responsibility of the country as a whole. Currently, that’s running at roughly $12.738 trillion dollars and growing at a pace of 1.422 trillion dollars per year. That means that in a nation of 300 million each individual share of the debt is $41,222 plus future interest, plus an additional $4605 dollars of new debt per person per year.
And so the national debt for which we are held corporately responsible is $12.7 trillion, not $55 trillion. So the 55 trillion figure for our government debt is, as we’ve seen, a myth. And now we’ll look at the second part of that claim: that China holds our national debt.
Our national debt is 12,765 billions. As you can see here, those debt obligations are issued in the form of treasury securities, which are held by people in a variety of nations by a variety of people. Of the 12,765 billions of dollars, 4,470 are intragovernmental, that is, owed by one part of the government to the other. Therefore, of the 12,765 billion we owe, about two-thirds, 8,295 billion, are owed to sources outside of the U.S. government. Of those 8,295 billion, there are 4,589 billion held by American citizens. This leaves 3,706 billion in foreign debt. Of these 3,706 billion, about 889 billion are owed to China.
So China owns just under 7% of our national debt–the average American therefore owes a Chinese person somewhere about $2,871.
So yes, we do owe China a significant amount of money. But they don’t own us. They’re not oppressing us by pulling all our financial strings. Our problems are our own, caused by reckless spending, and not by anyone taking advantage of us.
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