Heirs of Liberty Press

Who Owns America? A Review of the National Debt

C. Gialluca, Reporter / Columnist

As of May 1, 2009 the current US national debt is $11,208,076,192,300.55.  Of that $11 trillion, just under $7 trillion is debt held by the public.[1]  What constitutes debt held by the public you ask?  Debt held by the public is all federal debt held by individuals, corporations, state or local governments, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities.  These include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.[2]  The remaining $4 trillion is held by  Intragovernmental Holdings.[1] Intragovernmental Holdings are Government Account Series securities held by  Government trust funds, revolving funds, and special funds; and Federal Financing Bank securities. A small amount of marketable securities are held by government accounts.[2] Total Debt 1999 – 2009 (est)[3] 

End of fiscal year	Intragovernmental Holdings	Debt Held by the Public
1999	2.020 trillion	3.636 trillion
2000	2.269 trillion	3.405 trillion
2001	2.468 trillion	3.339 trillion
2002	2.675 trillion	3.553 trillion
2003	2.859 trillion	3.924 trillion
2004	3.072 trillion	4.307 trillion
2005	3.331 trillion	4.601 trillion
2006	3.664 trillion	4.843 trillion
2007	3.958 trillion	5.049 trillion
2008	4.216 trillion	5.809 trillion
2009 (est)	5.900 trillion	6.400 trillion

 One of the biggest concerns is who exactly owns the debt our government has incurred.  The following pie chart illustrates the answer to this very question. 

As the chart shows, China owns 24.7% of the debt, or $739.6 billion, followed by Japan with 20.66% or $634.66 billion, and then OPEC rounds out the top three with 6.06% or $186.3 billion, as of January 2009.[4]  That is $1.5 trillion of our debt held by the top three foreign governments, none of which like us very much, and that is BEFORE the passing of Obamas Omnibus bill, and the 2010 budget bill.

For the last ten years there has been what is known as a debt ceiling in effect.  At one time Congress approved legislation  for every debt issuance.  The massive growth of government fiscal operations in the 20th century has made this impractical.  The Treasury has been granted authority by Congress to issue such debt as was needed to fund government operations as long as the total debt (excepting some small special classes) does not exceed a stated ceiling.  This Debt Ceiling has been raised approximately every two years by Congress by passage of new laws.  The following table illustrates the rising Debt Ceiling from September of 1987 to February 2009.[4]

Date	Debt Ceiling
September 1987	$2.800 trillion
November 1989	$3.1227 trillion
November 1990	$4.145 trillion
August 1993	$4.900 trillion
March 1996	$5.500 trillion
August 1997	$5.950 trillion
June 2002	$6.400 trillion
May 2003	$7.384 trillion
November 2004	$8.184 trillion
March 2006	$8.965 trillion
September 2007	$9.815 trillion
December 19, 2007*	$10.615 trillion
October 4, 2008**	$11.315 trillion
February 13, 2009***	$12.104 trillion

 

*To account for the potential bail out of Fannie Mae and Freddie Mac.

**by the Emergency Economic Stabilization Act of 2008 (H.R.1424).

***by the American Recovery and Reinvestment Act of 2009 (H.R.1).

As you can plainly see the debt ceiling has risen exponentially and up until September of 2007 the increase has been about every 1.5 to 2 years.  Then in the space of what would normally have one increase in the debt ceiling, there were three to allow for legislation passed by congress, and there is doubt that this will be the last increase.

As with any loan, our government must pay interest on the loans from China, Japan, OPEC and other nations to which we owe.  What that means for you and me is that American citizens have been paying about $450 billion in interest each year.  Were it not for our obligation to pay the interest on these loans our personal income taxes would be approximately 40% less.  China, who owns $376 billion of the debt in Fannie Mae and Freddie Mac were especially worried about their investments, which is the reason that tax payer dollars were used to bail them out late last year. [5]

With the continues unlimited spending backed by this administration and its social agenda, the only direction for the debt to go is up and up.  China has recently made statements that they are unwilling to fund our debt any further under fears that there will never be a way to repay what we have already incurred.  Yet our congress and president turn a deaf ear to the dire predictions of economists, and other world leaders warning them to stop the spending.  Japan is in no better shape then we are and is unable to fund our growing debt.  That leaves us looking to the OPEC nations for further financial support.

Under fears that our government is willing to devalue the dollar to support its massive debt, China and other nations have called for the changing of the world currency from the dollar.  The result of something of this nature would be disastrous to our economy.  The citizens of this nation have taken to the streets demanding fiscal responsibility, and again the administration ignores their call.  With congress and the president turning a deaf ear to the demands of the citizens, it is believed that there may be only one way to stop the spending.  That would be to tie off the proverbial purse strings with a repeal of the 16th amendment.  This option is gaining the favor of the American public.  Every tea party member should start a campaign demanding Congress send to the states for ratification a Constitutional Amendment providing that:

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.

This would bring us back to our Constitution’s original tax plan, imposts, duties, and miscellaneous excise taxes on articles of consumption, and, a direct apportioned tax if Congress borrows to meet expenses…a built in method to balance the budget! [6]

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1. http://www.treasurydirect.gov/NP/BPDLogin?application=np
2. http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtOwner
3. http://www.ustreas.gov/ffb/
4. http://en.wikipedia.org/wiki/United_States_public_debt
5. http://www.cbsnews.com/blogs/2009/03/13/business/econwatch/entry4864398.shtml
6. http://www.asmainegoes.com/content/glenn-beckjudge-napolitano-push-constitutional-convention-repeal-16th-amendment