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In: Economics

How is the over 15 trillion public debt financed ?

How is the over 15 trillion public debt financed ?

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Expert Solution

The U.S. debt is defined as sum of all outstanding debt which is owed by the federal government. The main components are - Debt held by the public; and Debt held by government accounts. As of October 28, 2018, the public debt was $15.8 trillion. In 2017 debt held by the public was nearly 77% of GDP and ranked 43rd highest out of 207 countries. As of December 2017, nearly 45% of the debt or $9.3 trillion held by the public was owned by foreign investors, the largest part claimed by China (nearly $1.18 trillion) then Japan (nearly $1.06 trillion). The public debt can also be categorised into marketable or non-marketable securities. Majority of the marketable securities are bonds, treasury notes, and bills held by investors and governments internationally. The non-marketable securities are mainly the "government account series" owed to specified government trust funds such as the Social Security Trust Fund.


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