America’s national debt has been the subject of some speculation and concern this election year. As of August 31, 2016, the nation’s total outstanding debt was $19.510 trillion, up from $18.151 trillion as of August 31, 2015. That translates to roughly $58,000 for every man, woman, and child in the U.S.
According to the Treasury Department, America has added its latest $1 trillion of debt in the space of just 293 calendar days. By comparison, it took America 205 years (from 1776 to November, 1981) to accrue its first trillion dollars of debt. By the end of this fiscal year on September 30, 2016, only 13.5% of the outstanding national debt will exceed 10 years in duration.
To put it differently, in just the past 8 years, U.S. national debt has doubled, growing by more than 104% at a rate of 9.3% a year. Whereas the national debt was $9.492 trillion in June 30, 2008, it hit $19.382 trillion on June 30, 2016. Observers have pointed to this as an worrying and unsustainable trend of debt accumulation, especially in light of the absence of a debt ceiling. However, certain analysts point to America’s high credit rating, its ability to print money, low interest rates on U.S. debt and the continued faith of investors in American debt and argue that the situation is not so dire.
“There is no magic level of debt that gets an economy in trouble,” writes Scott Brown, chief economist of Raymond James. “Research arguing that view has been discredited. The federal government currently has no problem borrowing, nor is there any evidence that it is crowding out private investment.”
Another common concern raised regarding the national debt is aimed at America’s largest foreign creditors, namely China and Japan, who respectively held $1.3 trillion and $1.1 trillion of American debt as of February 2016. China alone holds a sizeable 7% of American debt.
But the greatest holders of American debt are in fact American citizens and entities, such as local governments, pension funds, and the Fed, who in aggregate own 67.5% (or $12.9 trillion) of the debt through Treasury bonds and other public debt securities.