Who Pwns the U.S.?

[:1]I found this article of interest.

I'm constantly hearing from some of my less-enlightened co-workers about how we're all going to be Chinese soon, etc. etc. Here's a summary, then, of what the actual breakdown of our debt is in the U.S.:


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Here's the big idea:

Many people � politicians and pundits alike � prattle on that China and, to a lesser extent Japan, own most of America's $14.3 trillion in government debt.

But there's one little problem with that conventional wisdom: it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt.

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

• Hong Kong: $121.9 billion (0.9 percent)


• Caribbean banking centers: $148.3 (1 percent)


• Taiwan: $153.4 billion (1.1 percent)


• Brazil: $211.4 billion (1.5 percent)


• Oil exporting countries: $229.8 billion (1.6 percent)


• Mutual funds: $300.5 billion (2 percent)


• Commercial banks: $301.8 billion (2.1 percent)


• State, local and federal retirement funds: $320.9 billion (2.2 percent)


• Money market mutual funds: $337.7 billion (2.4 percent)


• United Kingdom: $346.5 billion (2.4 percent)


• Private pension funds: $504.7 billion (3.5 percent)


• State and local governments: $506.1 billion (3.5 percent)


• Japan: $912.4 billion (6.4 percent)


• U.S. households: $959.4 billion (6.6 percent)


• China: $1.16 trillion (8 percent)


• The U.S. Treasury: $1.63 trillion (11.3 percent)


• Social Security trust fund: $2.67 trillion (19 percent)

So, what exactly does it mean? That we can default on paying ourselves back if we want, and concentrate on the amounts we owe China, Japan, the U.K. and others? Default on everyone, period? Scuttle Social Security and pay our debts?|||So, rather than speaking Chinese soon, we'll all be speaking English? Oh, wait... Just kidding. (nah, I'm not an 'speak English only' type -- just making a dumb joke)

It's nice to see a breakdown on the stats. It wouldn't be completely irrational to do what you've suggested, but I know a lot of people are angry enough about their money to not go along with it. For example, have you seen the money charts that roll during the credits of The Other Guys? A guy in the theater got angry and stormed out when he saw that, vocalizing quite colorfully about "My effin money."|||I'm mostly wondering where the remaining 24.5% went.|||Quote:








So, what exactly does it mean? That we can default on paying ourselves back if we want, and concentrate on the amounts we owe China, Japan, the U.K. and others? Default on everyone, period? Scuttle Social Security and pay our debts?




It's likely those institutions don't own any money themselves, meaning they own a debt themselves with the guarantee the US State will pay it back, so no easy defaulting unless you want the institutions to get into trouble.|||52.6% of our debt seems to be domestic, then. The rest (presumably the "missing" 24.6% as well) must be foreign-held. Well, that's somewhat of a relief, but it begs the question: how do we owe money to ourselves?|||The money is pretty much consolidated into the hands of a few. Consider this:


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1) The richest 10 percent of the American population owns 73 percent of the total wealth and 90

percent of corporate stocks; The richest 1 percent owns 60 percent of the total wealth and 62 percent of corporate stocks... The poorest 20 percent has MINUS 0.4 percent of total wealth...

2) The richest 1/2 of 1 percent (.005) of Americans own about 25 percent of the entire population's net worth.

3) The top 1/3 of 1 percent (.003) of adult American wealth holders own more than 20 percent of all personal property and financial assets (business capital equipment, etc.)

4) The richest 1/20th of one percent (.0005) of adults own 20 percent of all corporate stock, nearly 70 percent of the worth of all state and local bonds, and 40 percent of all bonds and

notes.

5) The richest 1 percent of the American population holds 62 percent of all business assets, 78 percent of all bonds and trusts, and 45 percent of all nonresidential real estate. They also own

own about 61 percent of all corporate stock...

6) Between 1973 and 1993, the richest 1/2 of 1 percent of Americans went up in their average wealth by 147 percent. The next 9.5 percent went up by about 65 percent. In California, the

average income of the richest 20 percent of citizens increased from $98,020 to $127, 020 since 1979 while the average income of the poorest fifth of the state’s families feel from $12,300 to

$9030.

7) The bottom 50 percent of all American families have only 3 cents of every dollar worth of wealth in our country.




So while our some of our debt is still held domestically, it's mostly so consolidated in the hands of a few (and they aren't going to spread the wealth anytime soon) that it might as well be held by the chinese. Except we'll still be speaking English.

As for the rest of the debt (social security, retirement funds) which make up a good chunk, looks like we'll never get that back.|||The government owes money to the people. Maybe some decide to invest in the government, or the government borrows from money it has control of but doesn't actually own.|||More likely, and it's happening now already, lobbyists and rich investors "invest" money into government but on the condition that their own self interests are met.|||Quote:








52.6% of our debt seems to be domestic, then. The rest (presumably the "missing" 24.6% as well) must be foreign-held. Well, that's somewhat of a relief, but it begs the question: how do we owe money to ourselves?




Historically, to raise money, a state would issue some form of bonds which could be purchased by any party (similar to a company issueing shares). The state would be indebted to the bondholders and either repay the price of the bond or be bound to pay interest to the bondholder. In practice bonds are rarely repaid, meaning the interest is a steady (but low) form of income - after all, unlike companies and shares, states can't go bankrupt*. This makes them a very stable investment, low risk low reward investment.

A (Western) governments finance is usually structured in a number of funds and treasuries; social security and pension funds tend to be the two biggest. Now, your pension and social security payments are pooled into their respective funds, making them quite large. Government cannot access these funds except for the payment of social services and retirement. These funds, despite their impressive size, are insufficient in covering the costs of retirement and social security if the institutes governing these funds don't invest the money. However, they can't make any high risk investments for obvious reasons. So they tend to go with the no-to-low risk investments: state bonds issued by credible states.

And that's why the higher centralized organs of government are often indentured to the higher centralized funds and treasuries.

*triple A states, anyway.|||Quote:








Scuttle Social Security and pay our debts?




Social Security is supposed to be $2.5 trillion in SURPLUS. That people have paid into.

Bush and Obama, of course, already spent it on tax cuts, wars, and bailouts.

Scuttling Social Security literally means robbing Americans of $2.5 trillion of their money.

Money that you and I have been putting aside for years.

EDIT: unless, of course, you a lobbyist paying billionaire, a government military contractor, or a lying bank/corporation. Then you are actually the robber.