Who Owns the U.S.?

by Greg Bocquet
Monday, February 28, 2011

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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.

 

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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 undisputedly the 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.

2. Japan

Amount of U.S. debt: $883.6 billion

Share of total foreign debt: 20.2%

The runner-up on the list of our most significant international creditors goes to Japan, which accounts for over a fifth of our foreign debt holdings with $883.6 billion in U.S. treasury securities. That astronomical number is just shy of the combined GDP of a significant chunk of the lower 48: Minnesota ($260.7 billion), Wisconsin ($244.4 billion), Iowa ($142.3 billion) and Missouri ($239.8 billion) produced a combined output of $887.2 billion in 2009.

3. United Kingdom

Amount of U.S. debt: $541.3 billion

Share of total foreign debt: 12.4%

At number three on the list is perhaps our closest ally on the world stage, the United Kingdom (which includes the British provinces of England, Scotland, Wales and Northern Ireland, as well as the Channel Islands and the Isle of Man). The U.K. holds $541.3 billion in U.S. foreign debt, which is 12.4% of our total external debt. That amount is equivalent to the combined GDP of two East Coast manufacturing hubs, Delaware ($60.6 billion) and New Jersey ($483 billion) -- which was named, yes, after the island of Jersey in the English Channel. The two states' combined output in 2009 came to $543.6 billion.

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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.

 

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©MS Illustration/Public Domain

 

5. Brazil

Amount of U.S. debt: $180.8 billion

Share of total foreign debt: 4.1%

Rounding out the top five is the largest economy in South America, Brazil. The country known for its beaches, Carnaval and the unbridled hedonism that goes along with both has made a big investment in the U.S., buying up $180.8 billion in American debt up to December. That's almost equal to the $180.5 billion combined GDP of Idaho ($54 billion) and Nevada ($126.5 billion), a state that is no stranger to hedonism itself.

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.

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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.

 

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©MS Illustration/Public Domain

 

8. Canada

Amount of U.S. debt: $134.6 billion

Share of total foreign debt: 3.1%

They say that a friend in need is a friend indeed, and our neighbor to the north has proven to be a kind and generous creditor in our time of financial need. Canada holds about 3.1% of our foreign debt, or $134.6 billion. If friend were to become enemy and Canada were looking to annex some U.S. land to cover the debt though, the country would have an easy time of it. The combined GDP of Maine ($51.3 billion), New Hampshire ($59.4 billion) and Vermont ($25.4 billion) comes close to Canada's debt holdings at $136.1 billion.

Residents of the three states in our extreme northeast corner should start practicing their French: They might become Québécois one of these days.

9. Taiwan

Amount of U.S. debt: $131.9 billion

Share of total foreign debt: 3.0%

Taiwan, an island barely 100 miles off the coast of China, is claimed by the People's Republic of China, despite having its own government and economic relations with the outside world. Part of those economic relations includes the island's holding of $131.9 billion of U.S. debt, roughly equivalent to the combined GDP of West Virginia ($63.3 billion) and Hawaii ($66.4 billion), which totals $129.7 billion.

Unless we get our spending in check, we risk losing some of our most visually stunning territory (West Virginia, obviously) to our friendly neighbors on the other side of the Pacific Ocean.

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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4,619 comments

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    Jake 1 minute ago Report Abuse
    Need to dismantle both political parties, start weeding out all of the marxists, communists and fascists and place them all on trial for selling out The USA.
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  • A Yahoo! User
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    A Yahoo! User 1 minute ago Report Abuse
    Lease a State for a year and be debt free. Or buy securities in the other countries and then swap them for our own.
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    cardmaniac 2 minutes ago Report Abuse
    yepper! time to arm the lawbiding redneck - USA first freedom. invest in gold. trust in in GOD.
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    Timothy 2 minutes ago Report Abuse
    It all starts with morality if people lose their moral things go astray. In america we have no right and wrong anymore people are lead by their latest whim. So we operate in stupidity. We have people sueing mcdonalds because they ate to many hamburgers and win, because justice is gone. Our founding fathers we christians and were held to a higher standard than what we see today. People if you want to see America get better pray that it finds Jesus again.
    Matthew 24
    Now as He sat on the Mount of Olives, the disciples came to Him privately, saying, “Tell us, when will these things be? And what will be the sign of Your coming, and of the end of the age?”
    4 And Jesus answered and said to them: “Take heed that no one deceives you. 5 For many will come in My name, saying, ‘I am the Christ,’ and will deceive many. 6 And you will hear of wars and rumors of wars. See that you are not troubled; for all[a]these things must come to pass, but the end is not yet. 7 For nation will rise against nation, and kingdom against kingdom. And there will be famines, pestilences,[b] and earthquakes in various places. 8 All these are the beginning of sorrows.
    9 “Then they will deliver you up to tribulation and kill you, and you will be hated by all nations for My name’s sake. 10 And then many will be offended, will betray one another, and will hate one another. 11 Then many false prophets will rise up and deceive many. 12 And because lawlessness will abound, the love of many will grow cold. 13 But he who endures to the end shall be saved. 14 And this gospel of the kingdom will be preached in all the world as a witness to all the nations, and then the end will come.

    People get right and our nations will get right!
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    Paul 2 minutes ago Report Abuse
    This was a comment I found that was posted by C. He is so right! Keep on dreaming HATERS of the United States. We will be on top for a long time. Enjoying the internet that we gave you. Wait and see what else we have! Here is the article C. wrote...

    This is a terrible article. No one is ever coming to collect unless they want to start problems within the whole world, because then EVERYBODY will come to collect. Furthermore, we can simply defer the loan to a later date, and if they don't accept, they can't do a thing about it, no one would risk war with the United States.

    Beyond this, this article is a hotbed of fear mongering and nonsense. Nobody owns the United States, is this a joke? Lines like "Let's hope Medvedev doesn't come to collect" and "Maine better practice it's French" are ridiculous! Canada is our greatest friend in the world other than other Anglospheric countries, and they would never seek to annex territory. Sovereign US territory would never be a part of any trade deal and we don't risk losing anything. The facts showing which debt makes up which state GDP is a neat statistic, but within the context of the writing just makes people afraid their state is going to be sold next financial summit.

    The writer is terrible and is just trying to get everybody riled up and should be ashamed; members of the media have a responsibility to their audience and the public to be reasonable, sensible, and cool the fires, not fan the flames. I don't think I'm taking this too seriously, this is the kind of stuff that does no good. If this is a joke, then it isn't funny, and I'm not laughing.

    Oh, and one final criticism: Panama is not a Caribbean nation, it's in Central America, and if the writer wasn't so busy digging up facts to scare us he could have done a little research on a thing called the Panama Canal. Ever heard of it? It's that thing that divides North America and South America. It's pretty famous so I don't know how a professional writer could make such a glowering mistake, but judging by the writer's article, he isn't very professional at all.
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    Linda 3 minutes ago Report Abuse
    Wasn't it George W Bush who said "the constitution is just a piece of paper?"
    I can't figure out how we let this happen. TWICE?
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    Marthinus 3 minutes ago Report Abuse
    Hmm... Might be about time to start seeing the world as one place, as in actual fact it is. As simple as it may sound, everything affects everything. It really is a pity that with great intelligence comes great [insert everything wrong with human nature here]! Odd that our biggest similarity is the fact that we are all vastly different. The fact that we do not seem to realize this is sad indeed.
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    Anon 5 minutes ago Report Abuse
    Thank you bush and the GOP--most of this debt came about becsue the GOP had the idea that "deficits don't matter." Now they have the nerve to blame Obma for what they did. And the tea bagers are dumb enough ot fall for it!
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    A Yahoo! User 9 minutes ago Report Abuse
    yes it is time to march on the whitehouse , set up camp in washington , be heard, impeach the president , bring in the army to takeover government , put obama in jail , along with the entire congress , take away thier assets , put the people in charge ....

    the time is coming , i will announce the date....
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    Paul 10 minutes ago Report Abuse
    There are allot of jealous and ignorant people making comments here. Not ignorant in their education but in their underestimation of the United States.

    China and the world "owns" us? They don't own us they own part of us and that is good insurance to see that they go along with us. Seriously, since when was it funny to think about as what the writer says in this article"it's fun to imagine what states and national monuments they could assert a claim to" How is that funny? Sounds like WW III to me. What happened when USSR collapsed? Think about it. Even if we did have to default. It would not be a foreclose sale where some United Nations Sheriff Evicts the government out of its office buildings. Yes the united states faced a major setback in September of 2008. When bankers selling risky mortgages as Grade A investments and it brought finance in the united states to an utter halt. Well it has been three years and we still have a very large employment base and so what this article asserts is that somehow China or other country's governments are going to try to lay claim to our lands if we default on Treasury Notes? Well my friends what your really talking about is mutually assured destruction? Lets get real. Who wants to roll back our lifestyles and see the end of the world. Scorched by fire as foretold in the holy books. Would it not be wise to live in Peace and not die in fire! God bless us all including China. Enjoy your work and be kind to one another. Is that so hard? Change Careers if you are board and disgusted but don't blame your lack of success on the global economy. There is still plenty of opportunity in this country if you want to move up. So what, if by our joint efforts China is rising. I am thankful to them for making such affordable products. Asia as a whole has benefited us greatly. We have had great appreciation and admiration to both Japan and Korea. We still love Toyota and allot of us remember when Japan invested so much in the united states and practically went broke doing it and the Japanese enjoy a lifestyle today to be envied. Get off the separation and discord with china and the rest of the world and face it that we are in a global economy and there is no turning back. China is busy growing its economy and will most likely see the financial setbacks that other countries see from time to time. If china went broke tomorrow i don't see us running over there to take over their lands and kicking them off. So why does anyone think they would like to do that to us? Who is going to buy their products? The Chinese don't have a consumer base like ours right now either. We can consume allot even if we don't have credit cards. The Chinese are delighted to do business with the US. Stop with all the hypothetical pipe dreams and look at whats true. If we had to make clothes here in the US we would. Our economy is beyond that for many. We Americans should be happy that we can work in restaurants and not factory's. Look at what a great time in history you live and the opportunities to come. The national debt is just part of the equation. Yes it needs to be reduced but please stop exaggerating about it. Everything will work out. They are up we are down. We are up they are down. It all goes in cycles. There is 90% percent employment in this country and not 90% unemplyement.
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