Morgan Housel: Who owns our national debt?

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Morgan Housel: Who owns our national debt?

Former Sen. Alan Simpson has arguably done more to address our fiscal problems than anyone else in the last three years. He was co-chairman of the president’s deficit-reduction committee, commonly known as the Simpson-Bowles budget plan. He’s a good man on a good mission.

But he doesn’t always get it right. Here’s Simpson last week on The Daily Show with Jon Stewart talking about the fiscal cliff:

There’s a group out there that doesn’t give a damn about Republicans or Democrats or the president, and it’s the people we owe $16 trillion to. Half of that is owned by private people — people in New York or Cody, Wyoming. The other half is owned by feds, and half of that is owned by China.

Time out. I like you, Alan, but let’s get the facts right.

China doesn’t own a quarter of our debt. It doesn’t even own 10%. When the latest data comes out, it probably won’t even be the largest foreign creditor. (That title will go to Japan.) China has actually been a net seller of Treasuries for almost two years.

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December 13th, 2012|