In July, 2019, the $22 trillion national debt is owned one-third by the American public. Foreigners and government agencies like the Social Security each own a little over a quarter, and the Federal Reserve bought an eighth of it on credit.

Some Debt Facts:

Social Security is $2.7 trillion in the black (Nov 2012). In 2010 it ran a $90 billion surplus. In 2018 it ran a $3 billion surplus, and the fund is at $2.6 trillion.

Clinton reduced the debt as a percent of GDP.

G. W. Bush restarted the deficits with tax cuts tilted toward the rich, and then continued with Medicare D, two wars and more.

Red ink hit a peak rate of $1.1 trillion in 100 days just before Obama was elected.

Obama’s stimulus was only $0.8 trillion.

Only $1.2 trillion is owed to China (11/2012).(6)

The General Fund and the Trust Funds

The National Debt is the debt owed to the “General Fund,” but the federal government has lots of trust funds. The big one is the Social Security Trust Fund, which had loaned the General Fund $2.9 trillion as of Jan 1, 2019.

Soon, Social Security will start needing some payback. And by 2035 it is expected that it will need all its money back. If nothing is done by then, Social Security payments will need to be cut about 30% because that’s how much less it will be taking in than what it owes to those collecting social security who have paid in over the years. Last time this almost happened it was 1983 and Ronald Reagan was president. The Soc. Sec. Trust did run out, but they immediately increased Social Security taxes and fixed it for fifty years.

Where does the money come from?

The General Fund: All personal and corporate income tax.

Social Security Trust Fund: Payroll taxes on wages up to $113,700 (as of 1/2013).

Medicare: Payroll taxes on all wages.

References

1. ↥ No the devastation of Europe did not helped the US. This is a crazy story made up by Republicans. But (1) We pulled out as we started building the Pentagon, which was before Pearl Harbor, and before the devastation of Europe. (2) It was GM building military trucks and tanks, etc. that did it.Take a look.

2. ↥ The General Fund is the main federal government fund, and its big expense is the military. Then there are the trust funds (Highway, Social Security, etc.). On average the trust funds have extra money that they are loaning to the General Fund, so a lof of the debt is owed to the trust funds.

3. ↥ “Owed to the Public” AKA Debt Held by the Public is the amount of Treasury Bills and Bonds that have been bought by American citizens and companies and by foreigners. The rest of the debt is owed by the General Fund to other government Trust Funds that have run a surplus. Note that since America mainly borrows from Americans, the debt is mostly owed to Americans.

4. ↥ Total Debt is the national debt (total accumulated debt) — the sum of all the annual deficits less any surpluses. The “deficit” is one-year’s shortfall. This shortfall must be made up by borrowing. But the Social Security Trust Fund and other government trust funds are not in debt. They have trillions in savings and the General Fund (which has the total debt, borrows from them).

5. ↥ Speed of the Clocks: Some days the debt actually goes down, and others it goes up extra fast. No one knows what it will do on any given day, so we just show it increasing at its average rate, because that’s the best guess.

6. ↥ From CNN July, 2011