Who Owns the U.S. Debt That Has Grown to $36 Trillion

The U.S. debt has been a topic of numerous discussions in economic and political circles for decades, and the latest data on its size and structure further fuels concern. After the national debt surpassed $35 trillion in August of this year, the figures are even gloomier as the year comes to a close. Specifically, the U.S. gross debt has reached an impressive $36.1 trillion, representing an increase of $1.7 trillion compared to the end of 2023, reports VC.

The national debt of the U.S. is the result of a systematic federal budget deficit, where the government spends more than it collects through taxes and other sources of revenue. To cover the shortfall, the U.S. Department of the Treasury issues securities such as treasury bills and bonds, which are purchased by investors from the U.S. and abroad, as well as various government agencies. Approximately 79 percent of the U.S. debt consists of public debt, which amounted to $27.3 trillion in 2023, and this debt arises when the U.S. government borrows money through treasury bonds, notes, and bills from domestic and foreign investors.

Historical data shows that U.S. debt has systematically increased since the end of World War II, when it stood at $260 billion. However, the largest jumps were recorded after the financial crisis of 2008 and during the COVID-19 pandemic when money was distributed ‘hand over fist’. For instance, during President George W. Bush’s term, the debt rose from $5.7 trillion in 2001 to $10.6 trillion in 2009. The pandemic further accelerated growth, with debt increasing by more than $6 trillion from 2020 to 2022.

At the end of 2023, the debt amounted to $34.4 trillion, of which 79 percent ($27.3 trillion) is public debt, while the remaining 21 percent ($7 trillion) is intragovernmental debt – debt within federal agencies such as Social Security and other state funds.

In the middle of last year, the CBO institute, which employs former officials from the U.S. central bank, the Department of the Treasury, and Congress, estimated that U.S. public debt could rise to 107 percent by the end of the decade and, according to their calculations, even 181 percent of GDP by 2053.

Major Creditors

According to data from the U.S. Department of the Treasury and the Peter G. Peterson Foundation, the largest creditors of U.S. debt come from three main categories: domestic investors, foreign investors, and intragovernmental agencies. The largest domestic creditor is the Federal Reserve System (FED), which holds $5.24 trillion in debt. As the central bank, the Federal Reserve uses these securities to implement monetary policy. Foreign countries and institutions hold a significant portion of U.S. debt – nearly $7.4 trillion. Among them, the largest individual creditors are Japan ($1.1 trillion) and China ($848 billion), highlighting the connection of the U.S. economy with global financial markets.

In addition to foreign creditors, a large portion of U.S. debt is held by the private sector, including investment funds and insurance companies, as well as pension funds that invest in bonds to secure stable returns.

It should be emphasized that one of the key indicators of debt sustainability is the debt-to-GDP ratio. At the end of 2023, the public sector debt amounted to 97 percent of U.S. GDP, meaning that nearly the entire annual production of the country is needed to cover obligations to creditors. In comparison, in the early 1980s, this ratio was only 31 percent, while during the pandemic in 2020, it briefly exceeded 120 percent.

With the announced return of Donald Trump to the White House in January 2025, ambitious reforms have been presented in the form of establishing a new Department of Government Efficiency (DOGE). Led by entrepreneur Elon Musk and former presidential candidate Vivek Ramaswamy, this department is tasked with identifying and eliminating excess in government spending. According to announcements, Musk believes that this could save up to $2 trillion in the next few years. If this plan is successfully implemented, it could significantly reduce the annual deficit or at least slow the growth of debt.