- The US federal debt has reached record levels, exceeding 120% of GDP in recent years.
- Japan and China remain the main foreign creditors, although the trend is diversifying.
- The sustainability of the system depends on the reduction of the deficit and the management of interest rates by the Federal Reserve.
To talk about the American economy is, inevitably, to talk about a mountain of borrowed money that keeps growing. The United States has crowned itself as the most indebted country on the planetThis situation generates both fascination and a certain amount of fear among international financial analysts, since the volume of its obligations is simply astronomical.
Although the dollar remains king and Treasury bonds the preferred safe haven when things get rough in the markets, the reality is that the sustainability of this debt It's a hot topic. It's not just a matter of numbers, but of how these figures affect the stability of the global economy and long-term investor confidence.
Current figures and evolution of indebtedness
Looking at the 2024 data, the situation is shocking. Public debt stood at around €33.106 billion, which is equivalent to 35.822 millionTo give you an idea of the growth rate, the figure increased by more than $2.400 billion compared to the previous year alone, surpassing the already considerably high 2023 mark.
This growth is not only seen in the total amount, but also in its relation to the country's wealth. In 2024, the debt reached 122,27% of the Gross Domestic Product (GDP)This represents an increase of more than two percentage points compared to the 119,96% recorded the previous year. Looking back to 2014, we see that global debt was approximately $18.478 billion and represented 104,94% of GDP, demonstrating that the trend is strictly ascending.
On an individual level, the weight of this burden is overwhelming. In 2024, per capita debt skyrocketed to $105.364 per capitamaking Americans the second most indebted people in the world. To put that in perspective, a decade ago, in 2014, each person carried about $58.005 in debt per citizen. It has almost doubled in ten years.
Who owns the US debt?
One of the most frequently asked questions in economic forums is: who really has the money? Interestingly, the largest holder of this debt is the own United States government and various administrative entities, which own almost half of the total. Essentially, they are lending money to themselves, a process known as debt monetization that is also very common in Europe.
As for foreign capital, it represents approximately 24% of the total. Japan leads the list External creditors hold $1,06 trillion, followed closely by China with $759.000 billion. Although China has reduced its share since its peak in 2010, both remain key players. By early 2025, the amount of debt held by foreigners reached record $8,8 trillion.
Risks, rating agencies and outlook
Not everything is optimistic. Agencies like Moody's, Standard & Poor's, and Fitch have lowered the US credit rating at various times, even stripping it of its coveted triple-A rating due to... chaos in economic policy and the growing deficit. This could, in theory, make the country's financing more expensive if investors started demanding higher returns on the credit risk taken.
Furthermore, there are fears that powers such as China or Japan will use their Treasuries as commercial pressure toolselling bonds massively to destabilize the market. However, for now, the dollar and bonds continue to be seen as the ultimate safe-haven asset, especially in contexts of high geopolitical tension such as the conflicts in the Middle East.
Future projections and possible solutions
The outlook for the coming years does not appear easy. According to macroeconomic models, the debt-to-GDP ratio is expected to reach 125,80% by the end of 2026Longer-term projections suggest that by 2028 this figure could stabilize or rise to 128,90%, maintaining a dangerously high trajectory.
To avoid a vicious cycle where the cost of interest forces the issuance of more debt to pay off the previous debt, a drastic reduction of the public deficit and superfluous spending. Furthermore, intervention by the Federal Reserve by lowering official interest rates would be crucial to reducing the Treasury's financial burden, although this could negatively impact the dollar's value against other currencies such as the euro.
The financial situation of the American superpower is precariously balanced between its global hegemony and a exorbitant public debt which has reached historic highs, even surpassing the peak of 126% of GDP seen in 2020. With per capita debt that continues to rise and an increasing dependence on domestic monetization and foreign confidence, the path to stability will necessarily involve much more rigorous fiscal management and control of interest rates to prevent the system from collapsing under its own weight.