Who Do We Owe Most of That $16 Trillion To?

Remember that when we speak about the $16 trillion dollars we have as national debt, we are not taking into account all of our outstanding unfunded liabilities which put us far above $200 trillion. However, the average American thinks that the bulk of our debt is owed to China. It's not. In actuality it's owed to us. It's the government's promises to the people through those investing in the United States, Social Security, pension funds and various other social programs.

Thought China is the biggest foreign holder of U.S. debt, it only amounts to less than eight percent of the total debt we have. In fact, they have been getting rid of that debt for quite a while now.

“It is true that China is the largest foreign owner of our debt,” said Josh Gordon, policy director of the Concord Coalition, a Virginia-based nonprofit that advocates getting the nation’s debt under control. “But the vast majority of our debt is held by us.”

Fox News reports,

Economists differ on when the National Debt actually crested the $16 trillion mark, with some saying it occurred on Friday and others saying it happens on Tuesday. But none doubt that the federal government's tab is immense and growing. Just under $5 trillion of the national debt is owed to the Social Security Trust Fund and federal pension systems. A little more than $11 trillion is owed to foreign and domestic investors and the Federal Reserve, which buys up treasuries in order to drag down interest rates through quantitative easing.

China has actually decreased its holdings of U.S. debt over the past year, dropping from $1.31 trillion in June 2011 to $1.16 trillion a year later, according to the Treasury Department. Japan holds nearly as much, at $1.12 trillion. Those countries are by far the biggest foreign holders, but dozens of other nations, including Brazil, Russia, Taiwan, Switzerland and the United Kingdom hold trillions more.

Inside the U.S., private investors hold nearly $1 trillion in federal debt, while mutual funds, insurance companies and state and local governments hold nearly double that amount.

Understand that between the last two presidents that our national debt has been growing exponentially. George W. Bush tacked on $5 trillion in his two terms and Barack Obama is looking to push more than that in one term. He chastised Bush in 2008 for taking "out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents … so that we now have over $9 trillion of debt that we are going to have to pay back.”

The problem is he has done the same thing and worse. When he took office in January of 2009, the national debt was $1.06 trillion. Now understand, if you watch those debt tickers they accumulate fast. That is because of interest and interest on higher amounts accumulates much faster than on lower amounts. So far, during the Obama administration he has added $5.4 trillion to the national debt. Yes, his one term has seen more than Bush's did in two terms.

Mr. Gordon has a theory as to why China gets blamed for its investments in the U.S. and keeping us from actually reckoning our account and rein in spending. “If you look 10 or 15 years back, they probably weren’t in the top five,” Gordon said. “Then you had this very large country whose economy suddenly grew a pace not normally seen, and that came just as we were going into a cycle of massive deficit spending. Honestly, if it had been Great Britain, instead of a country with a record of human rights violations and one that has not been a traditional ally of ours, you might not have heard as much about it.”

One thing is for certain: without real spending cuts and elimination of waste, it will not matter who is in office, Our debt will grow exponentially over the next four years. Congress must take the lead and stop wasteful spending and eliminate government programs and whoever is elected has to take a serious look at eliminating departments of the executive branch. If not, we will continue down the debt road.

Follow the national debt in real time.

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  • Chris

    Don't forget that the Iraq and Afghanistan wars hadn't even begun to be paid for yet. Killing 100,000 women and children by explosion is expensive!


    our congress is made up of just pathetically stupid people. Interesting article. So we've made empty promises to ourselves and other countries hold even emptier promises, good luck collecting. Ponzy Scheme to the max

  • Hardi

    Would you please check the number printed in this article? When Obama went in January 2009, the national debt was printed as $1.06 trillion. May be $ 10.6 trillion is the correct amount? Thanks!

  • reggiec

    Most is owed to ourselves. The criminal aspect of this is seldom realized by most. Normally when someone loans money to someone else they require interst at a rate so they get their investment back plus some profit. Government and the Fed are guilty of promoting inflation so thay can pay back their debt with cheaper dollars.
    Now for the real criminality associated with politically driven inflation. Let’s say you were a responsible person and were successful in saving and investing your accumulated wealth, receiving a return that matched the rate of inflation. In 1970 you invested $10,000 in something that returned 2.07% on average for the 42 years between 1970 and 2012. Inflation amounted to a total of 87% during those 42 years. So inflation was 2.07% per year on average during that time. Your $10,000 dollars invested in 1970 would now be worth about $58,000. Your money would now have about the same purchasing power that it had in 1970 if you could keep it all but the IRS will demand taxes on the $48,000 “profit” you made on your investment. Actually there is no real profit. You only retained the same purchasing power.
    Any investments made in say 1970 such as real estate, precious metals or stocks and bonds, may have increased that same 87% listed above solely due to inflation. Real value may have also increased but 87% will be due to inflation. The IRS however will claim that the 87% inflation are capital gains and will tax you for those gains they claim you have made. What they are basically doing is artificially creating gains due to government driven inflation; then taxing you for those “inflationary” gains. They are basically creating a situation where they can legally steal your money.
    The really sad part of this inflationary spiral is the federal government actually prefers that Americans are aware of the decreasing value of the dollar. The reason being is that it discourages saving and forces people to spend their money as fast as they make it so it won’t lose value due to inflation. The false idea is that this will keep the economy afloat. Remember; if inflation continues; interest rates, under normal conditions, will climb. Those lending money want enough interest tacked onto the principle to at least offset the inflation rate. The Federal Reserve has artificially kept interest rates low to encourage spending and discourage saving.

  • 1gentready

    With all of the insider trading that is being done by congress We the People should never have to pay congress a Salary. Congress makes massive amounts of money from insider trading and there Salary's they get from the tax payers is jest a drop in the bucket. So We the People should stop giving them a Salary and they can become Filthy Rich from jest doing insider trading but sense they take our money in a Salary they get even richer. It is time to give them a choice and if they want to do insider trading or get a Salary it has to be one or the other but they can't have both. We the People need to pass our own laws that will hold our Government and the people in that Government responsible for there actions. The Government and its employees are not above We the Peoples Laws and they will be held accountable.

  • heidihoneighbor

    China has removed all doubt that America is financially uneducated.
    America provides them with foreign aid and then turns around and barrows it back with interest.
    In most China newspapers you will read about how China wants to do more business with the USA. We have in essence made them to believe we are their cash cow.
    China would like to get their hands on those shovel ready jobs, because (right out of China Daily) they build better infrastructure than we do.
    America could learn something from the bible here ... give no more than 10% of your income to other countries. Anything above that should be provided via charity to which we are not.
    Funny that some American's still whine about wanting to spend more and trying to sell people on their theory of the larger the city the more tax revenue. They simply do not grasp the concept of Federal money not being FREE and at 44 cents of every dollar being barrowed, it really isn't a good time to be building light rail, and providing tax breaks to every buddy they have in business.

  • PFG

    Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts:
    16 Trillion = 16 Trillion.
    "$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs."

  • MrChuckster007

    Eventually, all this debt will have to be liquidated because the current course is unsustainable. However, when that occurs, unless it is done soon, even if it is done gradually over time their will be more pain and suffering than most can imagine. The only question is when? All you have to do is look at Greece and compound what is happening there to see what to expect if something is not done soon.

  • skipgainer

    Why do you people believe that our politicians want to correct the money problem America has? Voting these clowns out is not going to change a thing, we just get a new batch that will want to fill their pockets. Our politicians are owned by the rich and the big banks. Ask yourself why is not our southern border closed, because they the rich do not want it closed. Our border could be secure in less than 24 hours if we really wanted it closed. People wake up your not free you live in a police state run by the worlds elite. The rich will always have the best of everything they desire. What scares me now is they are talking openly about population control and ways to reduce the number of people on earth. The rich want to keep enough of us around to work for them and at the same time reduce our numbers so they can have THEIR garden of Eden!

    • Ray Trainer

      Obama is owned by the banks, some of his largest contributors BofA and Wells Fargo. The southern border is not closed because the DemoKKKrats need voters. The DemoKKKrats are for killing unborn babies...(population control) Romney and Ryan will balance the budget and if they don't we will get someone who will.

    • http://twitter.com/twistedkilt kilty

      You're a retardican.

  • Gil Jones

    Time to hit the reset button, scan disc and defrag won't work...Semper Fi bldg 7

  • darkcyder

    And who owns the most of our debt? The federal reserve, and when times get good again, they will demand their pound of flesh. And who is the federal reserve? Why, that's just the richest people in the USA and Europe- theVanderbilts, the Rothschilds, etc. The bankers. Read the book "the creature from Jekyll Island". It all comes clear. And what are they doing with the money they are "loaning" us? Why they're giving it to foreign countries through a mechanism called the IMF. Which just happens to be tied at the hip with the fed. Look it up.

  • tomtom

    This IDIOT is spending OUR money !! like a drunken sailor !!

    • MSM007

      I recall a former Drunken Sailor take offense to that kind of talk since even a Drunken Sailor stops spending money when he runs out of it.

    • Chemiker

      As a former drunken sailor, I resemble that remark. However, I still had the good sense not to spend money that I did not have.

  • http://pulse.yahoo.com/_BFEWWC44JYOFZ4K7MKFD4RNX4E Sam

    Voting out the criminals in power will increase the value of our country immediately.....

  • http://www.facebook.com/wattdwight Dwight Watt

    Fix your figures in the article. There was a 10 trillion debt when Obama came in not 1 trillion.

  • http://www.simplesearch.com/ California Architect

    Eliminate debt by paying it down. The only way we can do that is by phasing out socialist security, medicare, half of military spending, department of education, and the EPA. Interest on debt is currently low only because interest rates are low. Once rates rise, expect that portion of the budget to engulf half of half of the federal revenue.

  • http://profile.yahoo.com/CST3HQNE5AD5RTM23UHD5EL7UM Beer Can Beev

    Amazing. A guy who never made any real accomplishments leadership or business managed to sweet talk his way in the pilot of seat of America. Who in their right mind would put their hopes and promises in someone that has never been proven on the battlefield or has been thru the fire? I'm glad I voted for John McCain.

  • Guest

    It's not debt if we owe it to ourselves. The government needs to make good by performing on its promises, there's no reason to "cut" anything. The only way you can have "unfunded liabilities" is not printing enough money to pay for them. Obviously there's some circular reasoning, a smoke-screen going on. "Trillions" makes the eyes glaze over, a lie oft repeated, intended to frighten everyone into voting for the other party again. Frankly I think it's just a bunch of mean-spirited repugs who want to take US back a few decades and reinstitute wage-slavery, coercion, forced labor. When Biden said "They'll have y'all back in chains." ...he wasn't far wrong.  They don't like anyone getting free anything, it undermines their motivations to make money at everyone else's expense.

    • http://twitter.com/PabloDescartes pablo descartes

      Your eyes are brown from.what you are full of.

    • http://www.facebook.com/people/Wayne-Bauer/100000780337244 Wayne Bauer

      The perfect example of what is wrong in America, how can we survive if we don't eliminate these fools? Your phony money does nothing but make what workers have saved and invested WORTHLESS. It's the plan of corrupt government, carried out by federal reserve as scape goat. Printed money with NO real value cheats all americans.

    • Traitorhater

      Go back to your golf course, Barry's waiting.

    • MICHAEL Lajeunesse

      So if you owed your neighbor a million bucks, it's no big deal, right? You are such a schmuck.

    • Tommy Ge

      This is a prime example of why Michael Savage says that Liberalism is a mental disorder. I couldn't agree more.

    • hibp

      Does the Guest have ANY clue what inflation is and how printing money is going to devalue any savings, pension, etc he may have?? Raise costs? Etc I swear some of the democrats/liberals have never taken a basic economics class or worked in a business of any size or kind!

    • http://pulse.yahoo.com/_BFEWWC44JYOFZ4K7MKFD4RNX4E Sam

      Please educate yourself. It will do you good. Our national treasury is being robbed by the elite in power. The radical left and the radical islamics have joined together and plan on destroying our Constitution and our economy in order to bring about a "new" system. Don't believe it but that is what is happening.

    • GramE

      GUEST? Are y'all afraid to even use a screen name?