Four charts which explain US’s national debt | Number Theory

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US national debt surged past the $37 trillion mark in August, years ahead of the Congressional Budget Office’s 2020 estimate which had not expected the milestone to be reached until the next decade. Who owns the debt of the US? How soon will it mature? And how does the US compare on these parameters against other countries?

An employee counts US dollar banknotes at a currency exchange in New Delhi, India, on Aug. 30 (Bloomberg)

Who owns the debt of the US?

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  Who owns the debt of the US?

  When people talk about the “national debt,” they usually mean the portion known as debt taken by the government to finance its deficit. As of March, US public debt stood at about 119% of GDP – absolute levels of debt do not tell us anything about its economic importance – which is as high as the levels seen during the end of World War 2. The US Treasury breakdown of this debt shows that private investors hold nearly 68% of this debt, with the rest held by the Federal Reserve and government trust funds. Domestic investors such as mutual funds, banks, pension funds, insurance companies, and state and local governments make up the largest share, but foreign creditors also hold a sizeable $9.05 trillion. Japan, the United Kingdom, and China are the top three foreign holders, with stakes of about $1.13 trillion, $779 billion, and $765 billion, respectively. Foreign ownership of US debt peaked a decade ago, but has since declined even as the Fed’s share swelled during the pandemic, leaving domestic savers the biggest holders of US public debt.
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  Distribution of US debt by maturity

  Not all government borrowing looks the same. A key question for markets is when US debt comes due. As of June 2025, private investors held nearly $25 trillion in marketable interest-bearing Treasuries, most of it in the short- to medium-term range. About $8.3 trillion matures within a year, while another $8.8 trillion comes due in one to five years. Longer horizons are smaller: $3.7 trillion in the 5-10 year range, $1.6 trillion in 10-20 years, and just over $2.1 trillion with terms of 20 years or more. This maturity profile underscores the Treasury’s balancing act. Relying on short-term debt lowers borrowing costs today, but forces the government to refinance large sums each year, leaving it exposed if interest rates rise suddenly. Longer-dated bonds provide stability by locking in rates for decades, but they cost more to issue. Since the 2008 financial crisis, the Treasury has gradually extended maturities, though the pandemic borrowing surge tilted the profile back toward shorter-term bills. Foreign investors follow a similar pattern, though with some nuances. As of June, countries such as Japan, the UK, and China overwhelmingly held long-term Treasuries—over $1 trillion in Japan’s case—alongside much smaller positions in short-term bills. However, some financial hubs, such as the Cayman Islands, lean more toward short-term paper, reflecting their role as custodial centres. On the whole, external creditors prefer longer-dated Treasuries, while short-term debt is more heavily owned by domestic institutions.
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  How the US compares internationally

  Set against peers, the US is a hybrid case. As of December 2024, general government debt held by domestic creditors amounted to 105.8% of GDP, while foreign creditors accounted for 30.8%. That mix stands out internationally. Japan, the world’s most indebted advanced economy, relies overwhelmingly on its own investors, with domestic holdings close to 200% of GDP and external borrowing only 24.1%. The UK also leans heavily on home financing (125.4% domestic vs 27.9% external). In contrast, countries such as Spain (46.9% external) and Italy (42.1% external) show a much larger role for overseas investors, exposing them more directly to changes in global sentiment. The dollar’s status as the world’s reserve currency means foreign appetite for Treasuries remains deep, but the bulk of US borrowing continues to be absorbed domestically. That balance helps explain why America can sustain debt levels above 100% of GDP with fewer immediate financing pressures than many peers. Still, should the domestic demand for government bonds wane, refinancing large amounts of debt could quickly become more challenging for the US.