The national debt topped $16 trillion

Last week, the national debt topped $16 trillion.

But if you thought China's been doing most of the bankrolling, you might be surprised to learn who really holds our federal mortgage.  Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.

But China is the largest foreign owner of our debt.

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.

But politics aside, President Obama has been unable to slow the rapidly mounting debt. The nation owed $10.6 trillion on Jan. 20, 2009, when he was sworn in, and has added another $5.4 trillion since – more than President Bush piled up in two terms.  U.S. national debt now equals approximately $136,260 for every household in the country.  Since President Barack Obama was inaugurated on Jan. 20, 2009, the debt has increased by $45,848 per household—or about 50 percent per household.

Derived from Multiple Sources

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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