- The Federal Reserve is buying all the debt!
- Foreigners are buying all the debt!
- Banks and the public are buying all the debt!
It can be helpful to see the proportion of U.S. debt held by each of the entities (click to enlarge):
Neither of these is particularly helpful. Instead, we depict how the three entities have changed their holdings since 2007:Q4 (click to enlarge). Of the new debt, the public has purchased 41%, the federal reserve has purchased 14%, and foreign entities have purchased 45%.
Any dramatic stories you hear about U.S. debt eschew the facts in favor of hyperbole: disbelieve them. Debt has risen sharply, but none of these three entities has purchased more than 50% of new U.S. bonds.
Note: Millions should read billions in the relevant graphs! (E.g. U.S. debt has been in the 16 trillions range recently.