Credit, its the American Way

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The U. S. government owes $2.67 trillion to foreign governments and investors—20% of our total GDP. And that number has grown rapidly. “In 2001, China held $61.5 billion in U.S. debt. Now it has $541 billion,” says James Ludes of the bipartisan American Security Project in Washington, D.C. “In 2001, we owed Russia less than $10 billion. Now it’s $74.4 billion.”

The debt is sold to other countries in the form of U.S. Treasury securities. “We also have to pay interest on those securities,” adds federal budget expert Doug Elmendorf. In coming years, a big chunk of our country’s wealth will leave our economy and go overseas to pay back the loans. Will this outflow of cash affect our standing in the world? The U.S. emerged as a major global power after World War I, and the U.K. declined in part because we owned so much British debt. Ironically, today the U.K. is our third largest creditor.

Countries That Own the Most U.S. Debt

Japan $585.9 billion
China $541.0 billion
United Kingdom $307.4 billion
OPEC Nations* $179.8 billion
Caribbean banking centers** $147.7 billion

For a complete list of U.S. creditors, click here.

*Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, U.A.E., and Venezuela
**Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, Panama, and British Virgin Islands
Source: U.S. Department of the Treasury/Federal Reserve.

From PARADE Intelligence report

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