The US national debt is a topic that comes up a lot, especially if you listen to politicians debating the latest spending bills and government programs. The federal government is more than $30 trillion in debt, but what does that really mean, and who owns that debt?

We’ll break it down.

What Is the National Debt?

The US government raises money through taxes and spends the money it raises on various programs, such as national defense, health care, welfare programs, education, and more. Often, the government wants to spend more than it raises in taxes, which means it has to borrow money to finance its spending.

When regular people want to borrow money, they usually go to a bank and apply for a loan. The government, however, can’t do that. Instead, it sells government loan securities, like Treasury bills or bonds, to investors. These investors can be regular people, businesses, other countries, or even departments of the US government.

👉 US government debt is seen as some of the safest debt for investors to hold, so many people looking for a safe place to invest will try to buy US government bonds.

How Much Does the US Owe?

As of September 2022, the US national debt stands at $32.66 trillion dollars. Over the past 10 years alone, the U.S. federal debt has increased by more than a third. It went from $20.73 B in 2021 to $33.88 B in 2022.

U.S. National Debt Over the Last 100 Years
(Inflation Adjusted – 2022 Dollars)

The Two Types of National Debt

The US Treasury operates the Bureau of the Fiscal Service, which manages the nation’s debt. It regularly publishes “Debt to the Penny” which tracks the US government’s debt down to the individual penny.

The Bureau of the Fiscal Service breaks the US national debt down into two broad categories: intragovernmental and public.


Intragovernmental debt is debt that the Treasury owes to other federal agencies of the United States government. In a way, you can say this is debt that the United States owes to itself.

At the time of writing, of the country’s roughly $30.8 trillion in debt, $6.6 trillion is intragovernmental debt.

It’s a bit odd for the government to owe money to itself, so you might wonder why different federal agencies would buy government bonds. The reason is that some agencies bring in more money than they spend.

Rather than letting their cash reserves build up, these agencies buy government bonds to move the cash somewhere it can be used. It also lets these agencies earn interest on their excess income.

👉 For Example

In some years, Social Security takes in more in taxes than it spends on benefits.

In 2021, for example, while outflows from the Social Security Old-Age & Survivor’s Insurance (OASI) trust fund were greater than revenue, the Supplementary Medical Insurance (SMI) trust fund spent roughly $40 billion less than it received.

Another major holder of the country’s debt is the Federal Reserve. The Federal Reserve, as the central bank of the United States, sometimes buys and sells federal debt to adjust the money supply in response to economic conditions.

👉 For Example

In the wake of the 2008 financial crisis, the Fed bought trillions of dollars of federal debt from banks to lower interest rates, increase the money supply, and try to boost the economy.

Ultimately, this all means that a significant portion of the US government debt is owed to other parts of the US government.


Public debt covers all US government debt that is owned by parties that are not US government agencies. That includes individual investors, state and local governments, mutual funds, companies, and other nations.

At the time of writing, of the country’s roughly $30.8 trillion in debt, roughly $24.1 trillion is held by the public.

Intragovernmental Holdings and Debt Held by the Public 2022-2022
(Inflation Adjusted – 2022 Dollars)

Who Owns the US National Debt?

According to the government, the largest holder of US government debt is American investors. Overall, the American public owns $9.8 trillion of the government’s debt.

In fact, the top three holders of US government debt are based in the United States.

Once you get past the top three owners of government debt, you begin to see other nations show up in the list of America’s creditors. The top ten holders of US debt hold a total of 83% of the government’s public debt.

Who Owns the US National Debt ?

If you count American investors alongside intragovernmental debt, 53.6%, more than half of the debt, is owned by American entities. The largest individual foreign holder, Japan, owns roughly 4.2% of the national debt.

How Much Does the National Debt Cost?

Having debt means paying interest on that debt and government debt is no different.

US government debt is typically seen as some of the safest debt on the market and it receives top ratings from credit rating agencies, which means that the government is able to keep interest rates relatively low.

In 2022, the government spent $476 billion paying interest on its debts. Put another way, 2% of the country’s GDP went toward debt service.

In part due to rising interest rates, the Congressional Budget Office projects interest costs to rise to $1.1 trillion, or 3.2% of GDP, by 2029.

Is the US National Debt a Problem?

The $30 trillion question is whether the United States national debt is a problem. The answer largely depends on who you ask.

Many economists and lawmakers agree that some level of deficit spending and debt is necessary, or at least not the worst thing in the world. Taking on debt can let the government spend money on important projects or stimulate the economy during a recession.

However, most economists and lawmakers agree that excessive debt is a problem. Having too much debt means spending a lot of money on interest payments, which reduces the amount of tax revenue the government can use for government services.

The problem is that nobody really knows or agrees where the line is. People know that ballooning national debt can force spending cuts and tax increases, but there’s little agreement on where the problems begin. Some feel that the government has already crossed that line while others believe that the debt could double or more without being an issue

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