What is the USA Government Debt?
The U.S. national debt is now in the trillions of dollars, but many don't understand just what that means. Who owns this debt and just what it means to the deficit is often a hazy concept for most laypeople.
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The Big Number
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As of the middle of July, 2010, the national debt was more than $3.2 trillion dollars according to debt calculators on zFacts. This number reflects all of the debt owed by the federal government.
Breaking It Down
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Of this number, about two-thirds, more than $8.7 trillion dollars on the zFact calculator, is what is called public debt. The U.S. Treasury explains that this is the money that is owed to the people, businesses and foreign countries that have invested in the United States by purchasing U.S. Treasury bonds, bills or notes.
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What's Left
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The remaining one-third of the debt, approximately $7 trillion, is money that the government owes to itself. Funds such as federal trust funds and Social Security, both of which had collected surpluses for the short term, have "loaned" this surplus to the federal government to help meet the deficit. However, this money will need to be paid back in the long term.
The Deficit
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Reuters estimated the national deficit for 2010 would be around $1.5 trillion. The deficit is essentially the interest payment the federal government must pay on its debt in order to keep its loans in good standing.
Our Biggest Lender
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Other than ourselves, the biggest lender to the U.S. government is currently China. Colin Barr with CNN Money reports China owns approximately $895 billion, Japan owns about $785 billion and the U.K. owns about $279 billion.
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References
- Photo Credit statistic image by Soja Andrzej from Fotolia.com
