Sourced Content: Venture Capitalist
By Bruno Venditti; Graphics: Amy Kuo
Vancouver, Canada, March 6, 2025
The United States owes foreign investors US$ 8.5 trillion of its national debt, almost one-quarter of its total debt.
The graphic above illustrates the foreign holders of U.S. national debt using data from the U.S. Department of the Treasury, as of December 2024.
The Growing US Debt
The US debt increases when the government spends more than it collects in taxes and other revenue. To cover this shortfall, the US Treasury issues Treasury bills, notes, and bonds. These securities are highly liquid, widely used by central banks as reserves, and favoured by investors during market volatility. The national debt is the total of the government’s accumulated budget deficits, minus any surpluses.
As of today, the US national debt has surpassed US$ 34 trillion and, according to projections from the Congressional Budget Office, could reach US$ 50 trillion within the next decade.
Japan is the largest foreign holder of US debt, with over US$ 1 trillion, followed by China (US$ 759 billion) and the United Kingdom (US$ 723 billion).
Does the US Need to Pay Off Its Debt?
Technically, the US must pay interest on its debt and the principal of maturing government bonds.
However, as reported by Business Insider, it is rare for nations to fully pay off their debt.
For example, Great Britain still holds debt from the Napoleonic Wars.
More important than the total debt is its relationship to GDP; in other words, how much the country’s resources can cover interest and principal payments on that debt.
The US debt-to-GDP ratio was approximately 98% at the end of FY 2024—just below the critical 100% threshold, which some experts consider a warning sign.
Debt Under Trump
Another way to contain the growth of debt would be by reducing federal spending.
To achieve this, the new Trump administration established the Department of Government Efficiency (DOGE).
Under Elon Musk’s leadership, DOGE has already targeted several federal agencies.
The Department’s goal is to identify and eliminate unnecessary expenditures, with Musk estimating potential savings of US$ 2 trillion in government ‘waste.’
Bruno Venditti is a Writer and Amy Kuo is a Graphic Designer at Venture Capitalist. The above Report and graph were first posted on Voronoi app.
