That's a lot of debt there, government. Also, can I have my dollar back? (Image Source: Quoctrung Bui)
Much of the current talk of the federal government's shutdown, now in its tenth day, is now centered on the federal debt, and the artificial limit the government can borrow. It is likely that the limit will be reached sometime on October 17, next Thursday. But who does the American government owe money to? Where does the money the government borrows the money come from? The answer, in this chart, may actually surprise some of you: It mostly comes from Americans, or the American government itself.
The total debt of the American government is around $16.8 Trillion, or $16,800,000,000,000, if you need a sense of how large that number is. The American government borrows so as to maintain and expand operations, be it on new projects or new materials. Money is borrowed from various sources, partly to spread things out evenly, but more to make sure that the money flow is suddenly cut because a single source no longer wishes to lend money.
However, contrary to popular belief, only a third of money lent to the federal government is coming from foreign lands. The People's Republic of China, as people are wont to suspect, leads the foreigner pack with $1.3 trillion. Japan is not that far behind at $1.1 trillion, while the rest of the world makes up about $2.6 trillion combined. It totals to about $5.5 trillion, give or take a few billion.
The biggest creditor to the federal government's debt turns out to be the federal government itself, with nearly $7 trillion on the books. In most cases, people do not count these accounts, but we will do so for the sheer silliness of it. While the Federal Reserve is owed $2.1 trillion, the largest creditor to the federal government is the Social Security Trust Fund at $2.6 trillion, more than one-eighth of the entire federal debt. There are also trillions owed to veterans' pensions, as well as the federal worker pension system.
What remains of the $16,800,000,000,000 debt comes from domestic hands from domestic lands. State and local governments, pensions, Savings Bonds, mutual funds, and of course banks have a stake in the game. On a less monetary level, people, corporations, and brokers make up about $1 trillion. Which is understandable. I mean, I lent the government a dollar a while ago. Now I want it back. I need a dollar, is what I am saying.