Wednesday, February 15, 2012

Know about the biggest holders of US national debts...

by Delanna Hudson
As it is possible for an individual to take help from debt relief programs in order to address their debt problems, it is not so in case of the nation. As the U.S. government goes on spending tremendous amount of money in order to fix the economy, there is equally important need to raise cash in order to pay for it. This can be done through the activity of borrowing. Investors would buy government bills, notes and bonds as these are considered safe since they have a guaranteed rate of return dependant on faith in future tax revenues of the country. It has been for decades that the government has been partially funding operations through the Treasury securities. This borrowing brings the national debt level up and in recent times it has surpassed $15 trillion and is increasingly rising. This is approaching the federal debt limit which is currently at $16.4 trillion after raising it last August following a bitter political showdown between the Democrats and the Republicans. Although much of these debts are held by the private sector, almost 40% is held by public entities which also include parts of government. Read on to know about the biggest holders of the US government debt.
  1. Federal Reserve and intra-governmental holdings – The Federal Reserve System and other intra-governmental holdings are the biggest single holder of U.S. debt holding a value of around $6.328 trillion. Amongst this, the system of banks of the Fed owns around $1.65 trillion in US Treasury securities while the rest is held by intra-governmental holdings such as Medicare Trust Fund and Social Security Trust Fund which are large funds. These are combined in one category in Treasury bulletin.
  2. China – This eastern economy holds $1.132 trillion of US debts. It is the largest foreign holder of US Treasury securities. The present amount that China holds is down from all time highs of $1.173 trillion in July 2011.
  3. Other investors/Savings bonds – U.S. debt holdings of $1.107 trillion is held by other investors and savings bonds. Considering the most recent numbers from June 2011 this diverse group includes individuals, government-sponsored enterprises, bank personal trusts, brokers and dealers, estates, savings bonds and corporate and non corporate business.
  4. Japan – Japan is not only one of the largest trade partners of US, it is also one of the largest holders of US debt with the current amount being $1.038 trillion in Treasury securities.
Thus now you know the four largest holders of US debt both domestically and internationally.
Kp: debt relief programs