Dorothy Neufeld and Joyce Ma of Visual Capitalist show which countries hold the most US debt using data from the U.S. Department of the Treasury.
Today, America owes foreign investors of its national debt $7.3 trillion.
These are in the form of Treasury securities, some of the most liquid assets worldwide. Central banks use them for foreign exchange reserves and private investors flock to them during flights to safety thanks to their perceived low default risk.
Beyond these reasons, foreign investors may buy Treasuries as a store of value. They are often used as collateral during certain international trade transactions, or countries can use them to help manage exchange rate policy. For example, countries may buy Treasuries to protect their currency’s exchange rate from speculation.
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The US national debt will balloon by nearly $20 trillion over the next decade under the spending outlined in President Biden’s $6.9 trillion budget proposal released on Thursday.
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