I buy Treasury products for my investment portfolio sometimes.
Also foreign governments and central banks will have holdings. Tether (the cryptocoin) is largely backed by US treasuries.
Time would be better spent talking about other issues, but national debt is a simple number politicians can complain about rather than talking about the more complex issues that really impact the rest of us.
Often politicians will try to shrink or control the debt without deeply investiagting the true causes, because the real causes may be politically inconvenient.
That's not really the case with a nation-state with sovereign control over their own monetary policy. In that case, currency works a lot more like an MMO currency like RuneScape gold. The government gets to set up sources (government spending, killing goblins), and sinks (taxes, buying stuff from in-game shops), with the risk of screwing up the balance being a shift in perception of value of the currency. Just like how I never need to worry that RuneScape will run out of gold, and the next goblin I kill won't drop any, the government can't run out of money. It can always print more. Taxes are used to induce a demand for the currency (since you need to pay your taxes in USD), creating a flow of money through the economy. Tax too much, or print too little, and you make people expect the money to gain value, and shrink the value proposition of investment compared to hoarding money. Print too much, or tax too little and you end up with money piling up in some subset of your participant's balance sheets, shifting people's expectation to the money being worth less in the future, leading to a devaluation of said currency (since the people with a bunch of money are willing to spend more of it for the same good).
The key is that whole "expectation of future value" element, which differentiates government debt from private debt. It's a much looser coupling than "I have 45 cents in my bank account, I can't buy groceries this month". A currency can be useful, valuable, and perfectly suitable even if it loses a couple percent of its value every year, forever. That would reflect as a forever increasing national debt, but it's fine, because national debt doesn't matter.
Unexpected changes to the rate of change of the national debt is the thing that matters, and even then only indirectly, by way of the public perception of the value of the currency, which leads to the inflation/deflation rate.
At the end of the day, in the world of fiat currency, taxes and spending are not intrinsically linked. They're mediated by public perception of the value of the currency, which can be sensitive to unexpected speed ups of the money printers, but is frankly unaffected by the normal rate.
- The Federal Reserve
- Intergovernmental holdings
- Mutual Funds
- state and local gov
- Pension funds
- Insurance companies
- Deposit insurance
- Foreign holdings of all types
Does this mean the FDIC's Deposit Insurance Fund?
But the largest single holder is actually the U.S. federal government itself, which holds about 20% of the total debt as “intragovernmental” debt. These are real, legally binding financial obligations to federal agencies, most famously to Social Security.
So who owns the obligations? Many individuals and foreign states.
So who's that, it doesn't give any sense of proportion.
It's complicated as one can never be sure how a bond get wrapped into another product sold in foreign, and often obscurely complex structures. But we do have some estimated data points.
Contrary to another comment pointing at China, this country accounts only for tiny fraction of the overall amount credited.
For example, the UK, Japan, individually own more U.S bonds than China.
Anyhow they each represent around 1 trillion, so where is the rest coming from?
The majority of creditors in value are U.S entities and U.S individuals.
Some may recall a bank in California that went bankrupt a year or two ago. Unveiling a financial gig certain institutions enjoy doing: accumulate bonds as it always pays.
A few references: https://www.nasdaq.com/articles/20-countries-holding-most-us...
https://www.crfb.org/papers/qa-gross-debt-versus-debt-held-p...
Edit: another comment nicely broke down list of which U.S entities own what.
(a default on the debt, any of it, would be an extinction level event for the global financial services industry and then most real US industries in the following weeks)
In theory no, but when old debt matures, it is often paid by issuing newer debt that is financed at the higher rate. So in practice inflation does increase the dollar amount owned unless the government actively reduces the debt.
Taco bell seems ridiculous but the alternative is that they eat cat food.
tldr - the reason that going after the poor is always the answer is that it's the rich who are both asking and answering the question.
The wealthy boomers who own multi-million dollar California track homes and don’t pay taxes because of prop 13, who are consuming millions on quasi-necessary medical procedures because they partied too hard in the 70s, gorged on trans fats in the 80s, smoked drank and didn’t go for walks, that’s where entitlement reform should start. But those are the base of one, maybe both parties and will vote out anyone that refuses to subsidize their ozempic and knee surgeries. They will even vote to reduce democracy by gerrymandering the state to block third party candidates and ensure nobody can come for their unnecessary health care costs and other ballooning entitlements.
Most corporations don't make extraordinary profits. They make enough to stay in business, and if you tax them too heavily they will either raise prices or just close. So higher corporate taxes will ultimately depress business and be paid for by the consumer.
A few corporations certainly do make a lot of profit, and various "windfall profit" or "excess profit" taxes have been tried, but that's more about politicians trying to earn favor than anything that makes a practical difference.
Spending is the thing that's out of control, so that's where the problem must be attacked.
Corporate taxes are levied on profit, not revenue. Raising corporate taxes would not cause any businesses to fail. And businesses can only raise prices if the market will bear those higher prices. Prices are set based on what customers will pay, not on what profit margin the company wants.
How different would the world have been if either of the two "grand bargins" that Boehner started, and then Obama torpedo'd last minute (in the first example) or the second one (which biden as VP torpedo'd) happened? No rise of the tea party, working bipartisan arrangement on spending?
Shit matters.
Even SNAP only cost 100 billion last year, and its net effect on revenue was probably positive, though these things are hard to measure in isolation: https://www.cbpp.org/blog/snap-food-assistance-is-a-sound-in...
(Because humans are bad at large numbers: 100 billion / 38 trillion is 0.2%, or alternatively 38T represents 380 years of SNAP at 2024 levels.)
One day we'll look back and wish we had the self-control to both impose austerity measures to get the spending under control and the foresight to spend wisely on long term functions like infrastructure.
Until then it's business as usual from both political parties.
Letting people starve is a better solution than letting them drink soda and potentially develop diabetes over the long term? Preposterous. I don't understand why the common sentiment is that everyone who uses SNAP must enter into a contract with the state to lose weight and only eat heads of iceberg lettuce, lest they be labeled leeches.
But such regulations are easily subverted and ultimately may not make a lot of difference. If people want to live on Dr. Pepper and cigarettes they will find a way to do that.
Yes, the rich would whine about it and raise a fuss, but ultimately their lives would not actually change for the worse.
Whereas taking away SNAP and other entitlements would demonstrably make the lives of millions of people significantly worse.
Could this be how he stops the election, or stops the vote count?
His options are start a major war, default on the debt, ?
Hold onto your hats
You castrate the media, and take control of major vehicles to tilt the balance in your favour in quasi-sham elections; accumulate power in the executive while keeping the remaining seats of power under the thumb of the branch: legislative gets installed with sycophants/acolytes, judiciary power is tamed/dimished and regime-adjacent judges installed.
If you play this well you keep getting elected when elections happen and slowly twists more the sword into all democratic institutions.
[0] https://www.journalofdemocracy.org/articles/the-new-competit...
a) update the valuation of their assets, recognizing that they are instantly insolvent, cease trading, and lock their doors;
b) continue operating "illegally" in the hope that some sort of order will materialize
Option (a) causes all the non-cash economy in the US to stop functioning. The gold and silver bugs are, briefly, ecstatic - this is their moment. Everyone else who would rely on their debit or credit cards to buy food and gasoline, less so. The legal order that is supposed to maintain things like elections theoretically remains in place, but the rapid collapse in public order forces states to step in. You have elections to some thing called the "United States", but when most of its money has been rendered worthless, does it really exist any more? Essentially this is the "prepper" fantasy.
I am not saying it would be pretty or desirable, but by reading what happened to countries can give a notion.
It would eliminate the notion of the USD as the basis of foreign trade across the world, almost all of the finance system is supported by the USD being the safest investment available.
Firing Jerome Powell and pushing rates lower, in spite of reality on the ground, is effectively a form of soft default. (That, plus the laundry list of other things, which is too long to fit into a single HN comment)
The US will never stop paying its obligations. But driving away investment by breaking promises abroad and eroding political stability at home very much will cause the trust in the USD as an ongoing institution to evaporate. Sure, the US still pays its bonds on time in USD, but what is USD worth when the US cannot honor its trade obligations, cannot honor its diplomatic obligations, cannot be relied on as a stable partner?
It will be very scary when the US stops being the dominant financial system. So much of the US political economy (and more fundamentally, our way of life) depends on it.
But no one in politics won't do that.
I understand the self-interested desire for the ultra wealthy to have lower taxes on an individual level, but yet I still don't understand how they are perpetually blind to the fact that whatever the release valve for the historic and still growing massive wealth inequality we have takes, it won't be great for them either in the long term.
Sure its nice for them to make asset grabs during economic downturns, but eventually there's always a tipping point where things go upside down chaotic and I don't feel like we are that far away from it now.
I don't. It seems like mental illness to me
I meant I understand it in the sense that to get that wealthy in the first place you have to have a special kind of self-interested sociopathy, so in that regard I understand their desire. Not that I agree with it.
It's up to policy makers (i.e. government when it comes to taxation) to structure the system to mitigate the inherent self-interest that people have. Obviously that's easier said than done when the ultra-rich buy off the politicians, but human nature just is what it is.
I don’t. They have tens of millions to billions. What more do they want? Three yachts instead of two? A higher score than some other rich douchebag destroying lives for fun?
I mean, yeah, I think this is mostly it. Its gamification.
At the top level they all have more wealth than they could ever possibly use, even accounting for many generations of offspring.
Attempting to, and might get away with it for a while.
But I suspect next time there is an inevitable "equal but opposite reaction" the guillotine plans will be optimized using LLMs with shared open sourced designs.
(And in the current political environment, I think I should clarify this isn't me threatening violence -- I don't want violence. It is me recognizing that history "rhymes" while the rhyming patterns tend to happen on a faster and faster pace)
Once you get that wealthy the money is more of a disk measuring contest. There is no productive way for one person to really use money of that magnitude, the best they can do is dump it into stocks, bonds, real-estate, etc..., but nothing that really moves the economy. It's a big failure from an economic standpoint. Lots of "dead" money not being productively used.
No, the thing is to have a yacht with a yacht for a dinghy. And that comes with a helicopter.
The members of the billionaire class with any foresight are making a calculated bet that they will be in control of sufficient technological measures to suppress any kind of mass uprising by the populace. Look at all the resources going to Anduril and Palantir. Foucault's boomerang is on its way back towards the US populace right now.
That said, even that cadre far overestimates what technology can do. Adaptation is a fundamental pillar of the human condition.
My view with all that in mind is that spending has gone up quite a bit. Overall tax revenue has stayed remarkably consistent and the tax system is progressive (i.e. if you make more you pay more). Is it progressive enough? I don't know. What percent of the budget should that top 10% (or top 1%) be paying? 20%? 30%?
At the end of the day though getting 20% of GDP in to the Federal government as tax has historically been a heavy lift. If you get a government that's willing to vote to do that then I would be that that you will soon find new one that's willing to vote not to do that.
That said getting spending in the range has the same problem.
At some point though it seems inevitable that one (or both?) of those statements will prove to be untrue.
https://ticdata.treasury.gov/resource-center/data-chart-cent...
That should pretty much tell you everything.
Hacker News would be much better if all new accounts were banned by default until they were vouched for by users and earned a minimum amount of karma. I understand why this doesn't happen, but the problem of green accounts trolling and posting toxicity seems far worse than occasional mediocre humor.
The closest they ever came to actually caring about government was with Musk who went in and actually started (illegally) ripping shit out. But the things he ripped out were inconsequential things that conservatives didn't like, and he didn't even make a dent in the actual budget. All of the things that Musk got rid of were congressionally appropriated and could have easily been congressionally (i.e. legally) de-appropriated accordingly and it supposedly would be easy for them to do with majority control over the house, senate, executive, and judiciary...but they didn't do it, because they don't actually want to cut the budget.
Outside of retirees, much of the social safety net is funded at the State level. There is a wide variance in the benefits and quality of the social safety net across States.
The reason for the quotes is because that's an incomplete picture since various things can affect the debt without being noted in the annual deficit. For instance some programs are considered off-budget, there's various accounting restructuring, and so on. If you simply look at the total debt it has increased every year (again since at least 1970) with the only exception being 1999 to 2000 depending on when you measure it. If you look end of year vs end of year (as opposed to fiscal year), it decreased by a few billion dollars, and that was the only time.
https://fiscaldata.treasury.gov/americas-finance-guide/natio...
And the graph clearly shows we trend towards less spending under Democrats and then Republicans spend more again.
I don't find the partisan arguments interesting. Bush had a lower deficit (each and every year) invading and occupying two different countries than any president has ever achieved since then. That is not to praise Bush, but to emphasize that we're comparing horrible vs terrible and trying to argue over which is which. They're all miserable failures, and not just in regards to spending.
Running wars is a choice, a pandemic hitting not so much.
Neither party has any intention of repaying any of the $38 trillion, or care what it is spent on.
https://www.torched.la/why-this-convention-center-expert-is-...
What are you talking about here? Federal debt is repaid on bond schedules fixed by statute. You can look it all up. You can argue about whether the debt load is too high, too low, whatever. But you can't just pretend they ran away with the money like a thief. People loaned the government that money because they know the government is good for it.
That 38 trillion is 76 thousand dollars per person in the USA for instance. Pay that off? Really?
Federal budget argumentation is just exhausting. Fight about balancing the budget, sure. Fight about unsustainable deficits, sure.
But to claim that very manageable federal debt payments can't be made is just ridiculous. Yes, the US government is going to pay off that debt. Which is why they were able to borrow it in the first place.
There may come a time when the interest on the debt becomes so out of control that it cannot be serviced, likely in conjunction with people dumping bonds and leaving interest rates soaring. Meaning, America's credit goes up in flames. We're obviously not there yet and maybe it will never happen. That said, remember when Trump backed off extreme levels of the "Liberation Day" tariffs? Real fears of bond-dumping seem to have a lot to do with the more measured (relatively-speaking) approach to tariffs we're now seeing. If debt holders dump the 10-year bonds enough, it causes real issues for debt repayment.
No, it doesn't, it impacts future borrowing. Third time, before my blood pressure spikes: that is an argument about future debt. It being true (or not) has zero relevance to the current size of the debt. You could be right (or wrong) if we had zero outstanding debt, or if it was $70T.
Ergo, it's either an incorrect or bad faith analysis of the situation. The current debt (whatever its size happens to be in the fiction being spun) will be paid off at the bills' rates and on the statutory schedules. Period.
The issue I think most people are correctly pointing out is that our current debt is unreasonable -- that it constrains our future policies way too much. Cutting services is effectively impossible in our politics, which leaves only inflation on the table. That's pretty much the same as default. That is where we're headed.
The government can always repay by printing currency, but that's not the same. This is sort of a default too, since inflation eats away the artificially repaid debt.
Then Republicans took over the House in the midterms. They passed the budget (and Clinton signed it) that actually led to surplus for the first time since Andrew Jackson.
So, yes, it happened under a Democratic president. It only happened because of a Republican House, though.
(But let the president also be a Republican, and Republicans in Congress lose all fiscal discipline.)
Or is this more similar medical debt funny money where they just use a RNG to make up a number.
Or is this some 38T$ leveraged against our future? Like how this debacle in Chicago screwed over 75 years of residents.
https://www.courthousenews.com/seventh-circuit-upholds-chica...
"We", meaning the people and organizations, is not the same entity as "we" meaning the government.
That's what I'm asking who the debt actually belongs to. If it's "us", then how was it generated, who accepted the debt risk, and why's it going up faster?
Again, I make an analogy to $10000 tylenol pills, $16000 bandaids, and other obviously absurd medical fake number pricing. This $1T per year feels just as absurd and fake. And well, it's also a great wedge in Congress to bemoan and attack/shut down congress over that made up number.
https://fredblog.stlouisfed.org/2025/03/who-holds-us-nationa...
Yes? They're sold at auction. https://www.treasurydirect.gov/auctions/upcoming/ - I make that $547bn for auction over the next couple of days.
> who accepted the debt risk
The financial services industry. It's kind of what they do. Just because it "feels fake" doesn't make it so.
It's not really $1T sold though, $1T would be the net sales, as many bonds and bills would have matured in the same period. Gross sales is much more than $1T, but I'm not going to dig through to find those numbers.
You could maybe discount some of the issuance as internal borrowing/lending/savings, but if you want to treat programs as independent, then the interactions between programs and the general budget are real enough.
13% of federal taxes go to paying interest on the debt. That is 13 cents of every tax dollar paid. It is on track to hit 20% in the next 10 years, and that is assuming the US economy and tax revenue keeps growing.
Japan, UK, China, and the Cayman Islands are the largest private holders of US federal debt. [1]
What part of this seems incredible to you? It is indeed a lot of debt spending.
https://ticdata.treasury.gov/resource-center/data-chart-cent...
Also, fun fact, $1 trillion is about the daily private transaction volume of U.S. Treasuries.
The US government is a currency issuer so it’s possible but not advisable.
"The validity of the public debt of the United States [...] shall not be questioned."
Everyone is in denial about the whole situation. The sensible solution is probably the FED targeting a higher inflation rate than the 2% they would prefer and work it out slowly. Nobody is sensible at the moment, so we risk having either out of control inflation for a shorter time, or a lot of people lose money. If you have too much debt, people are going to lose money. The question is the amount of pain (and the collateral pain from secondary effects) that goes with it.
The part that is internal is mostly owed to social programs like social security.
so if you have any investments even in your 401k, or hold any ETFs, much of it is invested in those
holders are individuals domestic and worldwide, retirement plans, foreign governments, banks, central banks like the Federal Reserve
the US government slowly pays people back with revenue and other people's money via newly issued bonds, over time, and does it very reliably, so people keep buying. The US government's revenue comes mostly from tax collection, followed and a few other sources, some private sector ownership in recent decades, and it pays the interest on all of the active bonds.
> I don't believe the .. is not a ...
Instead, just tell us what you do believe. It's generally clearer to use "positive" language rather than stacking negations.
No they don't. If we're talking about federal income tax, the vast majority of is paid by the wealthy.
Of the $2.7T of not-mandatory spending, $0.9T was servicing existing debt. Of the remaining $1.8T of actual spending, defense accounted for $0.85T. The final remaining $0.96T is what's actually voted on in any budget, which is about 15% of all government spending (https://www.cbo.gov/publication/61184).
In an overspending crisis of such magnitude I wish there was more urgency in the culture to cut spending across every budget segment regardless of whether it's "mandatory" or not.
Sure, Medicare or Social Security can be cut, but see how that flies in the polls.
Debating changing mandatory spending laws in order to hopefully reduce mandatory spending is totally allowed, it's just very hard to know exactly how much you'd save with any change. The CBO will make estimates for you, but those are going to be based on assumptions which may or may not turn out to reflect reality in the future.
> In an overspending crisis of such magnitude I wish there was more urgency in the culture to cut spending across every budget segment regardless of whether it's "mandatory" or not.
I'm betting it includes stuff like Social Security payments, Medicare, etc. So it's fundamentally mandatory as real people's lives were planned around its availability.
New debt + interest (2024) = 6.2% of GDP
S&P 500 index (2024) = +23%
Good luck.
Investors in bonds look for a percentage growth, year over year. That's an exponential. A linear growth would be non-investable in the longer run.
From the other side, the US debt is quite linear on a log scale, so also exponential. That suddenly looks scary. But that is really to be expected? Exponential is the natural curve. If it wasn't exponential it would disappear, year over year.
Until our healthcare markets become more free market, this growth in spending will accelerate as boomers age.
Think the dollar may soon find itself as not only game in town for trade sooner than initially thought
Everything else, when talking about debt, is talking about rearranging chairs on the Titanic.
Fixing healthcare is essentially PBM reform, price transparency, drug negotiation, deregulation to increase supply, and subsidized GLP-1s since metabolic illness/chronic disease is like 90%+ of costs.
If we increase revenue and decrease healthcare costs, we could get to within 3% of GDP.
toomuchtodo•3h ago
rhetocj23•3h ago
supportengineer•3h ago
2Gkashmiri•2h ago
rtaylorgarlock•2h ago
louthy•2h ago
All your base are belong to US
But still, bravo
ta9000•3h ago
all2•2h ago
danans•2h ago
Probably, but for sobering reasons, maybe less so than in the past, because because 50% of US consumer spending is by the top 10%, and the top 10% is far less dependent on credit for their spending.
A society where there is a more balanced distribution of spending power would be more affected by a consumer credit collapse, but the treasuries of such a society might be more desirable anyways.
pjc50•2h ago
snowwrestler•1h ago
toomuchtodo•1h ago
Day gig is at a firm that extends consumer credit, so I keep an eye on cost of capital tracking, monitoring the spread, etc. Any debt packaged and sold into debt markets (asset backed securities) competes against treasuries from a yield (and risk premium pricing) spread perspective. Mortgages, auto loans, some credit card books, etc.
When the Fed cuts rates, your deposit account provider is going to start cutting your interest rate paid right away, but they’re going to maintain their credit rate pricing as long as possible (considering competition from other lenders) to maintain their spread and profit as long as possible. You see this with credit card interest rates, for example.
TLDR 10Y treasury sets the rate floor, broadly speaking.