April 5, 2010

Foreign Ownership of U.S. Debt Continues to Grow

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Using data from the Department of Treasury’s Financial Statement of the United States, this chart shows the United States debt held by the public from 2000 to 2009. These holdings have been divided into debt held by domestic investors and foreign investors. In 2000, foreign investors held roughly half as much debt as domestic investors; by the end of 2009, foreign debt holdings were slightly greater than domestic holdings of the public debt. While the ownership of our debt may be theoretically neutral, there is a case to be made that this debt reliance gives significant bargaining power to individual foreign governments.