Free Markets, Free People

Chart of the day – debt controlled by foreign governments

There’s been a lot of discussion about how much of our debt is controlled by foreign governments.  The answer is found in this chart.  In short a lot (more than half) and growing.

The significance?  A sort of unacknowledged elephant in the room:

While the ownership of our debt may be theoretically neutral, there is a case to be made that this debt reliance gives significant bargaining power to individual foreign governments.

In the world of international politics, nothing is “theoretically neutral” that can be used as an advantage against another country. In the case of our debt we are handing out that ability each and every time we spend more than we have and ask foreign governments to finance it. Another in a seemingly endless number of reasons to cut spending, stop borrowing, pay off our debt and get our financial house in order.



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