US national debt passes 20 trillion for the first time

An innocuous daily Treasury Statement filed three days ago has revealed the US Federal Government's gross debt surpassed $20 trillion for the first time.

The jump in national debt from $19.8 trillion to $20.1 trillion came after president Donald Trump last week announced the current debt limit would be suspended for three months until December 8.

Until that move, the US Treasury had been using "extraordinary measures" to legally keep debt over $19.8 trillion off the books, which would keep the finances from defaulting.

With the debt ceiling suspended, the US Treasury was once again allowed to borrow on open markets, thus lifting the gross debt above the once-feared $20 trillion mark.

(Image: Committee for Responsible Federal Budget.)

But contrary to popular opinion, simply because the US national debt is high does not mean other countries are knocking on the door to reap back what they loaned.

Much of the debt – an estimated $5.54 trillion worth – is owed by other government agencies, such as social security trust funds.

The rest of the debt, some $14.62 trillion, is what's called "Debt held by the Public".

According to the Us Committee for a Responsible Federal Budget (CRFB) this debt is anything the government owes to parties outside of the government itself.

"Debt held by the Public includes debt held by individuals, businesses, banks, insurance companies, state and local governments, pension funds, mutual funds, foreign governments, foreign businesses and individuals, and the U.S. Federal Reserve Bank," says the CRFB.

One of the most publicised foreign holders of this debt is the government of China, who as of May 2017 had loaned the US some $1.102 trillion.

Paradoxically, by owning this debt China can actually help grow its economy by keeping the Chinese Yuan weaker than the dollar – keeping exports cheaper for the enormous amount of manufacturing that takes place in regional factories.

The US government has been running at a deficit for the past 15 financial years, and the national debt is currently 76 percent of GDP, which the CRFB says is "higher than any time in history other than between 1944 and 1950" when the US government borrowed to finance the allies in WWII.
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