General Question

Nullo's avatar

We know about all of the money that the U.S owes. But how much do we loan out to the rest of the world?

Asked by Nullo (22009points) August 18th, 2011

And could we, if need be, give our credits to our creditors?

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6 Answers

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tedd's avatar

1) The money we loan out is different from the money we give out.

2) Combined the money we loan and give out to other countries would not even come close to the amount of money we owe in debt.

3) Our debt is in the form of treasury bonds. The government sells someone a bond (which is basically a “stock” in our government). The government gets that money and later on the person can cash in their stock for a slightly larger amount of money (1–3% pending country/state/etc).

4) Over half of the US’s debt is owned by US citizens and the US government (via intra-agency purchasing). The US government actually owns 47% of its own debt. Behind that China owns the most debt owed to foreign countries (roughly 26% of the total foreign debt, foreign debt making up roughly 28% of our total debt).

5) A more important number is the debt/GDP ratio. That’s our total national debt divided by our annual GDP (or income that our entire country makes). A “healthy” ratio is arguably around 75% (around this level it will actually help the economy). The US’s just hit 100% in the last month or so. It has been higher, reaching 150% after both the Civil War and World War 2. Some country comparisons, the debt/GDP ratio for Greece (with all their economic problems) is 130%. The United Kingdom (England) is around 94%. Japan sits at a shocking 204%.

6) Lastly, though the US government is roughly 14.2 trillion dollars in debt… Our income to the government last year was 3.5 trillion (and that typically goes up every year), and we have property holdings in the 90 trillion dollars range. If you look at the US as if it were a person, we’re not in that bad of shape.

(none of this is to suggest things couldn’t use to be changed, but just putting it into prospective for you)

mattbrowne's avatar

Who is we? US citizens owning securities which involves non-US public bonds?

Nullo's avatar

@mattbrowne ‘We’ as people who see the occasional headline about such things.

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