‘We’re living on borrowed time’: As national debt hits $39 trillion, a top diplomat warns of a crisis America isn’t ready for

[KenH]

‘ The debt is the symptom. The disease is political dysfunction. And right now, nobody in Washington is seriously treating either.

“At some point,” Haass said, “the chickens come home to roost.” ‘

- rest of article at 'We're living on borrowed time': As national debt hits $39 trillion, a top diplomat warns of a crisis America isn't ready for | Fortune

 

[Ben1445]

Well, some of that debt, a good portion of it, is people’s 401k’s. I don’t think that should be legal. It would not be that hard to cut that portion of the debt out either. No new debt for government from investors, and a clear path to end it would help that situation out.

 

[KenH]

I don’t think that should be legal. It would not be that hard to cut that portion of the debt out either. No new debt for government from investors, and a clear path to end it would help that situation out.

Please explain.

 

[Ben1445]

Please explain.

The national debt can be broken down by whether it is non-marketable or marketable and whether it is debt held by the public or debt held by the government itself (known as intragovernmental). The national debt does not include debts carried by state and local governments, such as debt used to pay state-funded programs; nor does it include debts carried by individuals, such as personal credit card debt or mortgages.

 

[Ben1445]

View attachment 13704


The national debt can be broken down by whether it is non-marketable or marketable and whether it is debt held by the public or debt held by the government itself (known as intragovernmental). The national debt does not include debts carried by state and local governments, such as debt used to pay state-funded programs; nor does it include debts carried by individuals, such as personal credit card debt or mortgages.

Debt Held by the Public
This consists of all national debt held by any person or entity that is not a U.S. federal government agency. This includes individuals, corporations, state or local governments, Federal Reserve Banks, foreign investors, foreign governments, and other entities outside the United States Government. The terms of these securities can range in maturity, the way they are sold to investors, and the structure of their interest payments. Debt held by the public does not include intragovernmental debt. For a list of foreign investors holding national debt, visit the Treasury International Capital (TIC) System.

It won’t let me link it but the description of debt held by the public is from the glossary from the same website.

 

[Ben1445]

Please explain.

I didn’t say that very well, but the short answer is the government stops borrowing money.
It’s one thing for a department to loan another department money. This should be done without interest. Interest between departments is a shell game to move money without a proper budget.
There is no reason for government to spend more than it takes in. Government should not borrow, but it is one of the places investors move to when they are trying to avoid risk. Ultimately the higher the government debt, the greater the risk. It ends up fanning the fire that your trying to put out.

 

[Ascetic X]

Key Creditors of U.S. National Debt:

• Foreign Governments & Investors: As of early 2025, foreign entities held a significant portion of U.S. debt, led by Japan, China, and the United Kingdom.
  • Japan: Top foreign holder ($1.06 trillion+), according to Congress.gov.
  • China: Second largest foreign holder ($759 billion+), according to Congress.gov.
  • Other significant foreign holders:
    UK, Belgium, Luxembourg, and the Cayman Islands.
• • Domestic Investors (Public & Private):
    • Federal Reserve: Holds a significant portion of U.S. debt to manage monetary policy.
    • U.S. Individuals & Businesses: U.S. citizens and institutions like banks, mutual funds, and pension funds hold debt via Treasury securities.
  • Intragovernmental Holdings:
    • U.S. Government Accounts: The U.S. government lends money to itself, specifically social security trust funds, federal employee retirement funds, and other federal agencies.
  • State and Local Governments: These entities also buy U.S. Treasury securities.