The U.S. government has about $31.4 trillion in debt to various creditors, including foreign governments, central banks, companies and investors.
This debt includes U.S. Treasuries and other securities, which are highly sought after as safe investments.
Many countries are buying U.S. Treasuries, one of the safest investment options available.
According to USA Facts, reports indicate that US debt to foreign countries amounted to $7.4 trillion as of January 2023, accounting for about 24% of the total US debt.
Japan and China are the top countries to which the United States owes the largest share of its foreign debt.
Over the past two decades, the two countries have held the largest proportion of U.S. Treasuries of other foreign countries and institutions.
Between 2000 and 2022, Japan's share rose from $534 billion to more than $101 trillion in U.S. Treasury bond debt, while China increased its share from $855 billion to $<> billion.
According to the website, the five countries to which the United States owes the largest share of its debt - according to the latest reports in January 2023 - are (respectively):
- Japan ($1.1 trillion)
- China ($859 billion)
- United Kingdom ($668 billion)
- Belgium ($331 billion)
- Luxembourg ($318 billion).
Amid warnings from the US Treasury Department about the risks of default on Treasury debt, US President Joe Biden and Republican House Speaker Kevin McCarthy on Saturday reached an agreement to raise the debt ceiling, thus avoiding default.
The agreement came ahead of the June 5 deadline set by Treasury Secretary Janet Yellen.
Outlook
An article published in the New York Times reported that America's debt is now 6 times what it was at the beginning of the 21st century, and has reached a record level since World War II compared to the size of the US economy.
The report predicted that this debt will grow at a rate of $1.3 trillion annually over the next decade.