Why is there a debt ceiling?
It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past. Failing to increase the
Who Owns All that Debt? At the end of 2023, the nation's gross debt had reached nearly $34 trillion. Of that amount, about $27 trillion, or 79 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors.
If the U.S. can't pay those bills, then it defaults on the national debt. This is where catastrophe strikes. Economists say consequences of a default on the national debt could include higher interest rates, a stock market crash, a recession and massive job losses.
Public debt, which accounts for roughly 80% of the total, is owed to investors. Those investors include foreign governments, mutual funds, pension funds, and individuals among others. The Federal Reserve owns part of this public debt. Intragovernmental debt accounts for the other 20%.
Today, our deficits are caused mainly by predictable structural factors: our aging baby-boom generation, rising healthcare costs, and a tax system that does not bring in enough money to pay for what the government has promised its citizens. And the more we borrow, the more we pay in interest on that debt.
The U.S. dollar would depreciate and the yuan would appreciate if China called in all its U.S. holdings, making Chinese goods more expensive.
Japan and China have been the largest foreign holders of US debt for the last two decades. From 2000 to 2023, annual totals are based on data from December, while the 2024 data is updated through April.
Eliminating the U.S. government's debt is a Herculean task that could take decades. In addition to obvious steps, such as hiking taxes and slashing spending, the government could take a number of other approaches, some of them unorthodox and even controversial.
Currently, China's total debt stands at around $47.5 trillion, which is less than the US's near $70 trillion. Notably, China holds the largest share of non-financial corporate debt globally, at 28%. Both China and the U.S. are among the countries with the highest debt-to-GDP ratios.
Answer and Explanation:
If the U.S. was to pay off their debt ultimately, there is not much that would happen. Paying off the debt implies that the government will now focus on using the revenue collected primarily from taxes to fund its activities.
How much debt is Russia in?
Russia National Government Debt reached 253.4 USD bn in Nov 2024, compared with 274.8 USD bn in the previous month. Russia National Government Debt data is updated monthly, available from May 2009 to Nov 2024. The data reached an all-time high of 384.2 USD bn in Jun 2022 and a record low of 86.1 USD bn in May 2009.
- Brunei. 3.2%
- Afghanistan. 7.8%
- Kuwait. 11.5%
- Democratic Republic of Congo. 15.2%
- Eswatini. 15.5%
- Palestine. 16.4%
- Russia. 17.8%

The US will borrow money as long as the US exists. Foreign governments will buy US Treasury Bonds as long as such purchases are in their interest. Currently they buy bonds to hold as reserves because US Treasuries are unlikely to lose value.
A U.S. default could erode their value, with massive geopolitical consequences. Source: International Monetary Fund. Many U.S. exporters could benefit from dollar depreciation because it would increase foreign demand for their goods by effectively making them cheaper.
Characteristic | National debt in billion U.S. dollars |
---|---|
2023 | 14,903.61 |
2022 | 13,066.2 |
2021 | 11,553.86 |
2020 | 10,102.36 |
But the most important reason is that China receives a surplus of U.S. dollars due to the trade imbalance between the two countries, as China exports more to the U.S. than it imports. But, Chinese companies and their workers need to be paid in China's local currency.
Federal Borrowing
The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government. Offered in a wide range of maturities.
For all the focus on China, Japan is actually the top holder of U.S. sovereign debt, with a total of $1.1 trillion.
One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.
- CANADA. 31%
- Other. 28%
- NETHERLANDS. 12%
- ITALY. 7%
- UNITED KINGDOM. 6%
- GERMANY. 6%
- PORTUGAL. 3.6%
- FRANCE. 3.2%
What is the most indebted country in the world?
At 54.44 percent of GDP, China's national debt has more than doubled since 2014, when it stood at 41.54 percent of GDP. With a $5 trillion dollar (about $38 trillion) national debt, China is the world's most indebted country.
Trump and his family reported more than $500 million of income in mid-2018 financial disclosure forms. In September 2020, The New York Times noted that Trump "is personally responsible for loans and other debts totaling $421 million, with most of it coming due within four years" and no obvious way to repay them.
At just under $36 trillion, or over $270,000 per household, the national debt has become America's second mortgage. Though often mistakenly viewed as simply a burden on future generations, the debt is both an echo of damage done to the economy and of damage to come.
The lowest-liability states—Arizona, Idaho, Nebraska, Tennessee, Utah, Wisconsin, and Wyoming—owe less than 3 percent of GDP.
Former financial arbitrage trader Jerome Kerviel is the most indebted man on the planet, owing his former employer $6.3 billion. The amount Kerviel owes to French bank Societe Generale for fraudulent trades made in 2007 and 2008 would make Kerviel one of the 50 richest people in America if those debts were assets.