The United States has the world’s highest national debt at $31.4 trillion.
Published On 31 May 202331 May 2023
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1 Jun 2023
04:05 AM (GMT)
Global debt currently stands at $305 trillion, $45 trillion higher than before the COVID-19 pandemic, according to the Institute of International Finance (IIF) – a global association of the financial industry.
Global debt is the total amount of money owed by corporations, governments and individuals around the world. Of the $305 trillion of debt, corporations account for $161.7 trillion (53 percent), governments owe $85.7 trillion (28 percent) and individuals comprise $57.6 trillion (19 percent).
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The IIF predicts that global debt will continue to rise as government borrowing remains high, affected by factors such as ageing populations, geopolitical tensions, increased costs of healthcare and disparities in climate finance.
Which countries have the most debt?
Government debt represents the outstanding financial liabilities of a country, made up of different categories such as loans and debt securities.
The IIF’s Global Debt Monitor covers 21 mature market economies including the eurozone as well as 30 emerging market countries.
The United States has the world’s highest national debt with $30.1 trillion owed to creditors as of the first quarter of 2023. Washington’s debt now stands at $31.4 trillion, raising further concerns about US government spending and borrowing costs.
To put that in context, the US owes as much money as the next four countries with the highest debt including China ($14 trillion), Japan ($10.2 trillion), France ($3.1 trillion) and Italy ($2.9 trillion).
The chart below ranks government debt around the world.
Which countries have enough money to pay back debts?
Countries with high levels of debt may offset their payments if their gross domestic product (GDP) – a measure of the total value of the goods and services a country produces – is higher than their national debt.
A government’s debt-to-GDP ratio, which compares the size of a country’s debt with its economy, is one indicator of a government’s financial sustainability. Any value greater than 100 percent indicates a country is spending more than it is making.
According to IIF, global governmental debt-to-GDP stands at 95.5 percent.
Japan, the world’s third largest economy, has the highest debt-to-GDP ratio at 239 percent. Tokyo’s high debt-to-GDP ratio can be partly attributed to its ageing population and social welfare costs.
Greece has the second highest debt-to-GDP ratio at 197 percent, followed by Singapore (165 percent), Italy (135 percent), and the US (116 percent).
What is the US debt ceiling?
The debt ceiling is the maximum amount of money the government can borrow. On January 19, the US hit its borrowing limit of $31.4 trillion. Since then, the Treasury has implemented a number of measures to avoid failing to pay back its legal obligations, known as a default.
A US default would likely push the country into a major recession, shake the world economy and lead to a spike in unemployment.
On May 28, after weeks of negotiations, US President Joe Biden and Republican House Speaker Kevin McCarthy, reached a tentative deal to raise the debt ceiling for two years while capping some spending.
After calling for a recorded vote, the House of Representatives voted to advance the bill 314 – 117 in a late night sitting on Wednesday.
FAQs
According to the International Monetary Fund's (IMF) measure of central government debt, the U.S. federal government is among the most indebted governments in the world. As of 2021 (the latest available data), federal debt reached 115 percent of GDP, ranking 16th highest out of 164 countries for which the IMF has data.
Which country has the highest debt in the world? ›
Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.
How much does China owe the US? ›
China (Mainland)
China is the U.S.'s second-largest foreign creditor, owing more than $1 trillion of U.S. debt. With 1.4 billion people, the world's second-largest economy and rapid economic growth, mainland China is an undisputed economic powerhouse [source: World Bank].
How bad is America's debt? ›
The $34 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. Learn more about different ways to measure our national debt.
Who owns most of the U.S. debt? ›
The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.
Who does the US owe debt to? ›
The public owes 74 percent of the current federal debt. Intragovernmental debt accounts for 26 percent or $5.9 trillion. The public includes foreign investors and foreign governments. These two groups account for 30 percent of the debt.
Will the US ever get out of debt? ›
Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).
Why is the US in so much debt? ›
One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.
What country is the US most in debt to? ›
Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
Who is buying U.S. debt? ›
The international buying appetite has been falling over the past 10 years (dropping from 40% to the current 30%). The major international owners of US debt include Japan ($1.1T), China, UK, Belgium, Switzerland, Cayman Islands and smaller amounts from the rest of the world.
China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.
What country owns most of the United States? ›
Which countries own the most land in the U.S.?
- CANADA. 31%
- Other. 28%
- NETHERLANDS. 12%
- ITALY. 7%
- UNITED KINGDOM. 6%
- GERMANY. 6%
- PORTUGAL. 3.6%
- FRANCE. 3.2%
1) Switzerland
Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.
What happens if U.S. debt gets too high? ›
A nation saddled with debt will have less to invest in its own future. Rising debt means fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.
Who owns the 34 trillion U.S. debt? ›
The $34 trillion gross federal debt includes debt held by the public as well as debt held by federal trust funds and other government accounts.
Which country holds more US debt than any other? ›
Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
What is the debt level of the United States? ›
What is the national debt? The national debt ($34.68 T) is the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation's history. Updated daily from the Debt to the Penny dataset.
How big is the US debt compared to the economy? ›
By the numbers: In the last century, the U.S. federal debt has risen from an inflation-adjusted $403 billion in 1923 to $33.17 trillion in 2023. The U.S. debt-to-GDP ratio surpassed 100% in 2013 and currently stands at 123%, according to the International Monetary Fund (IMF).
Can the US ever get out of debt? ›
Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).
