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š° $34.9 trillion
(This includes both public debt and intragovernmental holdings.)
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š Breakdown:
⢠Debt held by the public: ~$28 trillion
⢠Treasury securities bought by individuals, corporations, foreign governments (e.g., China, Japan), and the Federal Reserve.
⢠Intragovernmental holdings: ~$6.9 trillion
⢠Debt the government owes to itself (e.g., Social Security Trust Fund, Medicare).
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š Why is the debt growing?
1. Interest payments: Rising interest rates mean higher payments on existing debt.
2. Budget deficits: The government spends more than it collects in taxes.
3. Mandatory spending: Programs like Social Security, Medicare, and defense consume a large share.
4. Pandemic relief and stimulus programs (legacy impact from 2020ā2022).
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šŗšø Debt-to-GDP Ratio (2025):
⢠Around 123% of GDP
A level considered high historically. For context:
⢠Post-WWII peak was ~119% (1946).
⢠2007 (pre-crisis): ~62%
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š Why does it matter?
⢠Higher interest payments: Crowds out other spending.
⢠Investor confidence: Impacts bond yields and dollar strength.
⢠Inflation risk: If financed by money creation.
⢠Political pressure: On programs, taxes, and borrowing limits.