The Great American Debt Flow

EconMatters's picture

By EconMatters

The public debt of the United States has increased by over $500 billion each year since fiscal year (FY) 2003, and as of September, 2011, the gross debt was about $14.7 trillion, of which closed to $10 trillion was held by the public and about $4.6 trillion was intragovernmental holdings (e.g. Social Security, Medicare, etc. which some believe should not be included as part of the national debt).  The gross debt is about 98% of the U.S. GDP in 2011, and debt held by the public at 67% of GDP.

The U.S. is hardly the lone ranger on this great quest of debt accumulation.  According to the IMF Fiscal Monitor published in April 2011, general government gross debt-to-GDP ratios are rising substantially in most advanced economies over the period of 2010 to 2015.  IMF now projects that ratio would reach 107.3% by 2016 for the advanced economies, vs. 30.1% for the emerging countries.  Moreover, deficits in the United States, along with Japan, are expected to increase by at least 3% of GDP between 2007 and 2016.

However, the high debt level and the recent sovereign credit downgrade (albeit controversial) so far has not affected the U.S. borrowing rate benefiting primarily from the Euro Zone sovereign debt crisis.  The U.S. bond yields are still at record low levels, which has befuddled PIMCO the Bond King.  Treasuries have returned 9.8% this year, according to Bank of America Merrill Lynch Indexes as reported by Bloomberg. Ten-year notes have returned 18%, while 30-year bonds have returned 36%.

This anomaly in the bond market also temporarily blunted the urgency of an in-house debt cleaning.  Government is no different from an ordinary household in that when in serious debt trouble, you cut spending while trying to expand revenue stream.  But the Federal Reserve said on Sept. 21 that it would buy longer-term debt to lower borrowing costs and downgraded the economic outlook, while some experts see the U.S. is already in a double dip recession.

And as protests and strikes in Europe would attest that austerity measures, high unemployment rate, and diminishing household income tend to form a volatile mix.  From that perspective, the infographic is a scary reminder that America is at a treacherous debt crossroad, and most signs seem to suggest that things could get even more difficult from here on out.  


The Great Flow of US Debt

Created by: MBA Online

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JulesRules's picture

Doesnt matter. U.S will be the last to go anyway.


Mr_Wonderful's picture

Not a problem.

Another Texas nutjob is heading to the White House.

Potential sell-offs of big foreign holders of U.S. govt. debt will be designated as economic terrorism, requiring pre-eemptive wars against the creditors. That should keep the rest in line.



dizzyfingers's picture

"Another Texas nutjob is heading to the White House."

Hate to think you might be right. But not on my vote.

Lucius Cornelius Sulla's picture

The USA is too big to bail.  Caveat eptor!

Implicit simplicit's picture

US TAX REVENUE: $2,170,000,000,000 (TRILLION)
FED BUDGET: $3,820,000,000,000 (TRILLION)
NEW DEBT: $1,650,000,000,000 (TRILLION)
NATIONAL DEBT: $14,271,000,000,000 (TRILLION)
RECENT BUDGET CUT: $38,500,000,000 (BILLION)

Now let's remove 8 zeros and pretend it's a household budget.



From "Unfiltered News"

krispkritter's picture

Subtract any foreign 'aid' since uh, forever, input from military bases in those countries, all US company assets and funds held in those countries, all military spending from WW2, and syndication monies from shows like 'Baywatch' and 'Jersey Shore' and let's see what the totals are. (OK, just kidding about Baywatch and Jersey, can we sell them Hasselhoff and Snooki?)

acaciapuffin's picture

If you start paying now, you can do the snow ball effect on the debt and in a couple of years be debt free.

Tom Green Swedish's picture

The USA shouldn't owe them anything. THey should of the USA.

Tom Green Swedish's picture

The USA shoulnd't owe them anything they should us the USA.

Pitchman's picture

The New World Order Of Debt Slavery Economics depends on the ever expanding debt.

Nice Graphic!

I immediately went looking for South Korea - $104 billion.  It's interesting to think about the shear social, politica,l economic, and military insanity of American leadership and the lack of accountability demanded by the American People. 

Think of the ROK after the war and others after WWII.

We have had troops in South Korea for 58 years - somewhere from 40k+ to around 20+ plus other supporting personel today.  They pay nothing for our millitary support.  Yet last year we imported over 750,000 autos and countles other goods.

+ Japan

+ Germany.

See how money, created out of thin air, can disappear as if it never existed:

Evaporation of Wealth on a Vast Scale: How $Millions - Trillions Can Disappear

Also See: Fibonacci Numbers - The Fingerprint of God & God Within

Inflection Point

proLiberty's picture

Because the major economies are so intertwined and the currency of one is so easily converted to another, the issue is not so much the collapse of any one country's currency, but the collapse of fiat money in general.

CrazyCooter's picture

I am kind of in this camp. When currencies implode, trade will face plant in the mud. This will trigger the real shit show.

I would love to be wrong, but I am over-buying pretty much all food products with shelf-life with the expectation that I will see empty shelves for a month or three for powers that be to work something out.

I would love to hear constructive arguments in either direction. I just don't see how this can continue; the math seems so broke.



Caviar Emptor's picture

I was told that deficits don't matter....

Dingleberry's picture

Don't worry about the will be passed on to the next three generations or so......

lucasjackson's picture

Sounds like we're in a dilly of a pickle.  What if we charge these punetas for the protection they currently enjoy by way of the strongest army that has ever existed?  Nuke China and everyone else will remain surprisingly quiet regarding this issue.  We are resource abundant and put up with entirely too much shit from nations that are clearly inferior to us. 

CrazyCooter's picture

If I have to explain the petro-dollar, I think I am wasting my time.

Nukes solve nothing. Rent "Reservoir Dogs" and skip to the end where all the bad guys have a gun pointed at each other. This is nuke policy for the poor man. Sounds great when you are slugging beers and shooting your mouth off around friends though. Glass parking lots and all that.

Prosperity is very simple; producing the goods people want to enjoy life. If I got it wrong, please rip me up in the comments.




lucasjackson's picture

Sounds like we're in a dilly of a pickle.  What if we charge these punetas for the protection they currently enjoy by way of the strongest army that has ever existed?  Nuke China and everyone else will remain surprisingly quiet regarding this issue.  We are resource abundant and put up with entirely too much shit from nations that are clearly inferior to us. 

Absalon's picture

Most of that debt is being held by other countries as part of their foreign exhange reserves.  Part of it is being held off shore by American companies who refuse to repatriate and pay taxes (hello Caribean banking centers) - so it is not really owed to foreign interests.  The money owed to Japan and China is mostly the result of long term currency manipulation by those countries (the real reason Japan stagnated was that China started competing with them in the manipulation game).  


The fact is that the money can only be repaid by those offshore interests spending the money in the United States which would drive the American economy into hypeer drive.  What does China get when they demand payment?  Bails of greenbacks or fleets of Boeing 747s. 

hungrydweller's picture

They don't have to demand repayment all at once.  They just have to slowly convert smaller repayments to hard assets.  This is exactly what they are doing.  We either get our fiscal house in order or we are toast in the next 20 years.

CompassionateFascist's picture

We're past the "crossroads": 2011 Debt-ceiling debate was the last chance to get the gub'mint out of the credit market. Shitface Repubs fumbled the ball again. Now, we're riding a fast neutrino to Hell. 2012<-------->1860. 

CapitalistRock's picture

That's the problem. If all those foreign central bank reserves come back to the US it could easily create an uncontrolled inflation.

That returning money is no better for the economy than printed money. It works the same.

geekgrrl's picture

Much of that debt is due to the effects of compound interest on debt, which can only exist in an expanding economy. Take away growth, and repayment of interest is mathematically impossible. To pay off existing debt, more debt must be brought into existence because there is interest on that debt. To pay this interest, more money must be brought into existence, which again, comes with interest. This is the equation for exponential increase, and that does appear to describe the growth in the US national debt, and many other countries around the world. It's a deliberate arrangement that's come to it's logical conclusion: banks owning countries and dictating how governments will treat their people. There is all sorts of flowery language by bankers to disguise the fact that this is what is actually happening around the world, but that doesn't change the basic facts. Whole countries are being enslaved by private bankers answerable to no one.

My hope this weekend is that the Greeks push back very hard and show the rest of the world what democracy looks like.

Debugas's picture

Iceland showed us the way out

I hope greeks take the advice and follow the same way

Georgesblog's picture

U.S. citizens accepted the benefits? of being shareholders in the Federal corporation. By accepting those benefits, they VOLUNTEERED to pay the DEBTS of the CORPORATION. You can look it up in Black's Law Dictionary.

dizzyfingers's picture

Tumbrels and guillotines...that'll void that contract.

SwingForce's picture

If those idiots in Congress think I'm paying this back, they are OUT OF THEIR MINDS. I don't remember co-signing for these loans. On the other hand, get the INTEREST RATE down low enough, and we WON'T have to pay it...

Debugas's picture

Swing, have you stopped paying your taxes already ? Oh and how about when you go to the shop - you do pay sales tax dont you ?

bill1102inf's picture

Debt only matters if you intend to pay it .....  

TheBadgersSett's picture

Quite. Not sure about the US, but in the UK the worst they can do for non payment is confiscate your (over valued) assets. Let them have them by all means, in the coming months and years you will appreciate how important it is to be nimble and unecumbered by material posessions and worthless 'assets'. If it doesn't scare you to have debt collectors phoning you, doing their best to antagonise you into entering a financial arrangement with them, if you have no ambitions to appear materially successful to your peers, if you accept that financial wealth is just a 'transitory' illusion then this is the path for you.

There was a time when I felt morally obliged to pay all my debts to the bank and for several years I always did. But that moral obligation has clearly been shown to be misplaced; its 'capitalism' baby! They try to rob you, you try to rob them! Its a great system if you can see it for the sham it is and abuse it as it is abused by them.

Georgesblog's picture

Debt matters if someone comes after you to take it out of your hide. The central banks have always had people working muscle for them. That includes the standing armies of the world.

PulauHantu29's picture

Buy everything on credit today...and never pay back! This is the new economy!


"But economists say the Fed's effort — dubbed Operation Twist after a similar Fed program conducted during the Chubby Checker dance craze of the early 1960s — probably won't make much difference. Rates on mortgages and other loans are already the lowest in decades.

Frightened Americans would rather cut their debts than borrow, and businesses aren't seeing enough sales to justify hiring and expanding despite rock-bottom borrowing costs. The Fed's announcement underscored the fear that the American central bank had run out of tools to stimulate the economy. That leaves fiscal policy — government spending programs and tax cuts — as the only other way to juice growth."

Read more:
dizzyfingers's picture

The economy no longer belongs to the people.

Until that changes, don't live to serve the elites; their sources of power can be cut off by a determined populace -- credit and taxes.

Sudden Debt's picture

Actually you do. Your country will keep on slipping down the poverty line, you'll keep on paying taxes knowing that every year it will increase untill you'll lose it all.


Georgesblog's picture

That has always been the plan, as long as there have been central banks. Thomas Jefferson was right.

"If private banks are allowed control of the issuance of currency, they and the corporations that shall spring up around them shall deprive the people of all liberty and property. They shall find themselves homeless on the land their fathers settled."

Prescient and prophetic words, there.

ping's picture

Holy Shit! I just realised: evil European bankers and aristocratic families plotting to bring down the nascent American republic? This is the plot of Zorro 2! Antonio Banderas, we need your wisdom now more than ever! ;o)

(But I agree with what you're saying, sadly. **** the bankers.)

Djirk's picture
i live in the Netherlands, send me the $75 and put a leash on that hypocrit Geithner
Little John's picture

$14,458 - Deal me out.  I ain't saying I ain't got it - but I sure as hell ai'n't gonna give to no damned furriner.

Little John's picture

on the other hand - do ya think they'd take a check ?

ping's picture

I'm not taking a cheque until your nation spells the word properly, the way god intended!!!

It could have been so different, America! I hear that debt collectors suggest to broke women that they get 'creative' in the way they pay off debts. Well, you didn't vote Palin in, and I'm sure as hell not sleeping with Michelle Obama. Teeth where they just shouldn't be. So I want my $1,111! I'm driving over there right now!

Or an Olsen Twin. Whichever one is chunkier.

OK - and this is my final offer - you can keep the money if you make 0Bama wear a fez and ride a tricycle at my next birthday party.

Jesus, ok, keep David Beckham and I'll throw in twenty bucks. And some book tokens.

Ok, ok, whaddabout: keep the $1,111, keep David Beckham, I give you twenty bucks, you can freeze the surviving Pythons in Carbonite for safe keeping (we don't care, they were funny 40 years ago, they're like Lucille Ball dammit) but you have to start pronouncing 'herb' with an audible 'h'. 

ping's picture

Either someone here needs psychiatric help for thinking Michelle Obama is hot, or David Beckham is reading ZeroHedge. Who knew?

New_Meat's picture

You are assuming that this is exclusive-or.  The thought-->eeeewwww.

JW n FL's picture



The only reason that America Owes Debt off shore is so that Banks on shore can collect fees..

So that the Share Holders of the Federl Reserve Bank can collect 6% on every dollar printed into circulation.

If America owed the Federal Reserve Bank $14 trillion in printed monies America would simply Not! pay the $14 Trillion.. so the debt has to belong to someone else other that ourselves.

The Fact that America has a 120% +++ amount of leverage on every U.S. dollar verse say the Chinese 1,200%+++ Leverage.. means that "We the People" are Transfering over 1,000% of our Wealth to China with every dollar they are allowed to invest into a U.S. Treasury (or other).

This is the biggest scam going and because the Value of the Yaun? is under valued.. says Cable News in Heavy Rotation / 4 times an hour.. makes it so?

China services its debt or leverage on its Yaun / Renminbi thru production.

7 to 12 Cities a year are built that NO ON LIVES IN! and this is how China services its debt.

and the dumb ass people of America buy the story becuase it is repeated and repeated over and over again making China's Dollar "Strong like Bull!" 

China's dollar is SHIT! and all of these Government Plants and / or STUPID Parrots should be rounded up and shot for Treason.

Stupid is as Stupid does. (Sino) Forrest Gump

EconMatters why dont you see if you can get Tyler to remove this post too you fucking moron.

MayIMommaDogFace2theBananaPatch's picture

Where is the Fed?  I thought they were the new number-one-holder of US debt?

eddiebe's picture

Cheese and Rice! Is there any good news anywhere out there? I'm loosing weight and I'm turning mighty pale!

DosZap's picture


Wait until you see the NEW FINANCIAL TRANSACTION TAXES going into effect.

You aint seen nothing yet.

Herman Cain a GOP entrant to the GOP race for the nomination, said if ObamaCare were in effect, he would be DEAD.(Herman is a black man).

Old Poor Richard's picture


Would cure what ails us.  Put them only on derivatives. 


Seasmoke's picture

How the fuck do i owe Israel $61.......they have done nothing but take US money since the day i was born

BigJim's picture

Ah, but they turned around and lent some of that money back to Uncle Sam. Pay up, bucko.

Sudden Debt's picture



Montgomery Burns's picture

I'm happy to pay my share off as long as I get to opt out of any future borrowing on my behalf.