Who owns the US?

Federal_Debt-VS-Taxes

Image via Wikipedia

By Greg Bocquet, here:

Regardless of how much closer Obama’s budget brings our economy into a balance of payments not seen since 2001, we will continue to run deficits for the next decade, and the national debt will keep growing every year that happens.

While most of the country’s $14 trillion debt is held by private banks in the U.S., the Treasury Department and the Federal Reserve Board estimate that, as of December, about $4.4 trillion of it was held by foreign governments that purchase our treasury securities much as an investor buys shares in a company and comes to own his or her little chunk of the organization.

Looking at the list of our top international creditors, a few overall characteristics show some interesting trends: Three of the top 10 spots are held by China and its constituent parts, and while two of our biggest creditors are fellow English-speaking democracies, a considerable share of our debt is held by oil exporters that tend to be decidedly less friendly in other areas of international relations.

Here we break down the top 10 foreign holders of U.S. debt, comparing each creditor’s holdings with the equivalent chunk of the United States they “own,” represented by the latest (2009) state gross domestic product data released by the U.S. Bureau of Economic Analysis. Obviously, these creditors won’t actually take states from us as payment on our debts, but it’s fun to imagine what states and national monuments they could assert a claim to.

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©Radar Communication

1. Mainland China

Amount of U.S. debt: $891.6 billion

Share of total foreign debt: 20.4%

Building on the holdings of its associated territories, China is the undisputed largest holder of U.S. foreign debt in the world. Accounting for 20.4% of the total, mainland China’s $891.6 billion in U.S. treasury securities is almost equal to the combined 2009 GDP of Illinois ($630.4 billion) and Indiana ($262.6 billion) in 2009, a shade higher at a combined $893 billion. As President Obama — who is from Chicago — wrangles over his proposed budget with Congress he may be wise to remember that his home city may be at stake in the deal.

[…]

4. Oil Exporters

Amount of U.S. debt: $218 billion

Share of total foreign debt: 5%

Another grouped entry, the oil exporters form another international bloc with money to burn. The group includes 15 countries as diverse as the regions they represent: Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. As a group they hold 5% of all American foreign debt, with a combined $218 billion of U.S. treasury securities in their own treasuries. That’s roughly equivalent to the combined 2009 GDP of Nebraska ($86.4 billion) and Kansas ($124.9 billion), which seems to be an equal trade: The two states produce a bunch of grain for export, which many of the arid oil producers tend to trade for oil.

[…]

6. Caribbean Banking Centers

Amount of U.S. debt: $155.6 billion

Share of total foreign debt: 3.6%

You have to have cash on hand to buy up U.S. government debt, and offshore banking has given six countries the combined capital needed to make the Caribbean Banking Centers our sixth-largest foreign creditor. The Treasury Department counts the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles, Panama and the British Virgin Islands in this designation, which as a group holds $155.6 billion in U.S. treasury securities. That’s equivalent to the GDP of landlocked Kentucky ($156.6 billion), whose residents may not actually mind if they were ever to become an extension of some Caribbean island paradise.

7. Hong Kong

Amount of U.S. debt: $138.2 billion

Share of total foreign debt: 3.2%

At No. 7 on the list of our foreign creditors is Hong Kong, a formerly British part of China that maintains a separate government and economic ties than the communist mainland. With $138.2 billion in U.S. treasury securities, the capitalist enclave could lay claim to Yellowstone Park and our nation’s capital: The combined GDP of Wyoming ($37.5 billion) and Washington D.C. ($99.1 billion) totaled $136.6 billion in 2009.

[…]

10. Russia

Amount of U.S. debt: $106.2 billion

Share of total foreign debt: 2.4%

Starting off the list of our major foreign creditors is Russia, which holds about 2.4% of the U.S. debt pie that sits on the international dinner table. Its $106.2 billion in treasury securities is equivalent to the 2009 GDP of our sparsely populated North: The combined output of North Dakota ($31.9 billion), South Dakota ($38.3 billion) and Montana ($36 billion) matches up nicely with the Russian holdings, at $106.2 billion.

Let’s hope Russian president Dmitry Medvedev doesn’t come to collect.

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