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Who Owns the U.S.?
by Greg Bocquet
Monday, February 28, 2011provided by
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.More from MainStreet.com 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.
©Radar Communication1. 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.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.[World’s Most Innovative Companies]
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.
©MS Illustration/Public Domain5. 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.[The Top Franchises For the Money]
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.
©MS Illustration/Public Domain8. 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.