The meme of China the moneylender is proving to be a salient political tool in Washington. Scaremongering about China owning this country is popping up on the left and the right.
The Chinese buy our bonds to keep their currency down and exports from China cheap. Some see this as a reason for the credit bubble of the mid-late 2000s as well.
Yes, China and other foreign countries own a great deal of US government debt, but the lion's share of the government's liabilities is owed to other Americans. Very often, the government owes itself.
Hong Kong
Total Holdings of US Treasuries: $121.9 billion
Percent of US Debt that they own: 0.9%
Source: US Treasury
Caribbean Banking Centers
Total Holdings of US Treasuries: $148.3 billion
Percent of US Debt that they own: 1%
The Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama, and British Virgin Islands all function as offshore financial centers. Of course, they invest in Treasury Securities as well.
Source: US Treasury
Taiwan
Total Holdings of US Treasuries: $153.4 billion
Percent of US Debt that they own: 1.1%
Source: US Treasury
Brazil
Total Holdings of Treasuries: $211.4 billion
Percent of US Debt that they own: 1.5%
Source: US Treasury
Oil Exporting Countries
Total holdings of Treasuries: $229.8 billion
Percent of US Debt that they own: 1.6%
Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
Source: US Treasury
Mutual Funds
Total Holdings of US Treasuries: $300.5 billion
Percent of US Debt that they own: 2%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
Commercial Banks
Total Holdings of US Treasuries: $301.8 billion
Percent of US Debt that they own: 2.1%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
State, Local, and Federal Retirement Funds
Total Holdings of US Treasuries: $320.9 billion
Percent of US Debt that they own: 2.2%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
Money Market Mutual Funds
Total Holdings of US Treasuries: $337.7 billion
Percent of US Debt that they own: 2.4%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
United Kingdom
Total Holdings of Treasuries: $346.5 billion
Percent of US Debt that they own: 2.4%
Source: US Treasury
Private Pension Funds
Total Holdings of US Treasuries: $504.7 billion
Percent of US Debt that they own: 3.5%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
State and Local Governments
Total Holdings of US Treasuries: $506.1 billion
Percent of US Debt that they own: 3.5%
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
Japan
Total Holdings of Treasuries: $912.4 billion
Percent of US Debt that they own: 6.4%
Source: US Treasury
US Households
Total Holdings of US Treasuries: $959.4 billion
Percent of US Debt that they own: 6.6%
The 'Household Sector' does include hedge funds, by the way.
Source: Federal Reserve Flow of Funds Accounts Note: Latest Statistics are as of March 2011
China
Total Holdings of Treasuries: $1.16 trillion
Percent of US Debt that they own: 8%
Source: US Treasury
The Federal Reserve
The Treasury owes the Fed $1.63 trillion in Treasuries, much of which were bought for the Quantitative Easing programs.
That's 11.3% of US debt, much more than China.
Source: Federal Reserve
In all, the Treasury owes foreigners and foreign governments $4.514 trillion dollars
But Americans own most of their own country's $14,342,909,569,328.74 of debt.
Social Security Trust Fund
Total Holdings of US Treasuries: $2.67 trillion
Percent of US Debt that they own: 19%
The Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds invest exclusively in special issue bonds that are only available to the Social Security trust fund. These are not publicly traded securities, but they still constitute a huge amount of debt.
Source: Social Security Administration