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by avsteele 1000 days ago
Where are you getting these numbers?

Debt held by the US gov as a whole is only about a quarter of the total

https://www.marketwatch.com/story/heres-who-owns-a-record-21...

The amount of interest it must pay is proportional to the debt, but can also rise quickly with interest rates a a lot of the debt is rolled over on fairly short timescales (<1 yr IIRC) Debt service is going to start crowding out other spending in short order.

If the US gov monetizes the debt it will mean it has to pay more interest on what remains and what is issued in the future.

So this matters a lot. The situation is untenable.
2 comments
smithza 1000 days ago 

  “With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”
Quote from the article. Also from the article:

  But the debt is on track to top $50 trillion by the end of the decade...
The taxpayer's dollar is increasingly being spent on things that don't further any policies whether their desired or no. Simply paying off debt that will mount and mount with no end in sight.
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bryanlarsen 1000 days ago
Your graph shows 38% held by the US gov & fed.

And those are old pre-pandemic numbers. The amount the Fed holds has gone up a lot (aka quantitative easing). So the number is even closer to half now.

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metaphor 1000 days ago
> So the number is even closer to half now.

Nope[1]. Local maxima at 42.5% circa 21Q4, but currently 38.3% and trending down since.

[1] https://fred.stlouisfed.org/graph/?g=18ZDm

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avsteele 1000 days ago
Not at present (intergovernmental is 22% as of Jan 2023)

https://www.thebalancemoney.com/who-owns-the-u-s-national-de...

But even if you were right, it wouldn't matter.

Fed debt is effectively monetized or will be sold back to the public later. It doesn't change anything. At best you can make a hand waving claim about it meaning we can get away with a bit lower interest rates while monetizing.

The rest held by the gov is mostly social security. It represents an obligation to make payments to people outside the government (under current law). Not sure why anyone would think this doesn't matter.

We'll learn soon enough whether the US defaults, monetizes, or substantially reduces SS payments first. Suppose tax increases are theoretically possible, but they would need to be substantial to cover the deficits of 25% we run regularly now.

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