Fed Chair Jerome Powell said this week that while US government borrowing at current levels is “unsustainable,” the current debt level is “very sustainable” and won’t be a concern in the near-term.
“The US federal budget is on an unsustainable path, meaning simply that the debt is growing meaningfully faster than the economy,” he said at a virtual event hosted by the Economic Club of Washington, DC. “The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable future.”
But he said the government will have to get its debt to return to more sustainable levels once the economy has stabilized.
Annual debt in the US, which currently stands at $28 trillion, is growing faster than the size of the economy. US debt has spiked 200% since 2008, and risen by almost $8 trillion during former President Donald Trump’s tenure. It’s accelerated even further over the past year, alongside massive stimulus aid programs that have helped prop up businesses and families against the fallout from the coronavirus crisis.
Powell has downplayed concerns that US debt could fuel inflation and suggests tackling it should be done “in very good times, when the economy is at full employment and when taxes are rolling in.”
The US Treasury provides detailed data on who owns US debt.
Here’s a look at the top 15 countries in the world that America owes:
14. Saudi Arabia – $135.1 billion
13. Singapore – $164.3 billion
12. India – $211.6 billion
11. Cayman Islands – $217.6 billion
10. Hong Kong – $223.9 billion
9. Taiwan – $438.7 billion
8. Belgium – $248.2 billion
7. Switzerland – $254 billion
6. Brazil – $260.4 billion
5. Luxembourg – $281.4 billion
4. Ireland – $313.6 billion
3. United Kingdom – $438.7 billion
2. Mainland China – $1.2 trillion
1. Japan – $1.7 trillion
Apr. 17, 2021, 01:00 PM