- 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 speak of the American economy is, inevitably, to speak of a mountain of borrowed money that continues to grow. The United States has become the most indebted country on the planet , a situation that 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 is a burning issue. 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 striking. Public debt reached approximately €33.106 billion, equivalent to $35.822 billion . To give you an idea of the rate of increase, compared to the previous year alone, the figure rose by more than $2.400 billion, surpassing the already considerably high level set in 2023.
This growth is evident not only in the total amount but also in its relation to the country's wealth. In 2024, debt reached 122,27% of Gross Domestic Product (GDP) , representing an increase of more than two percentage points compared to the 119,96% recorded the previous year. Looking back to 2014, we see that total debt was approximately $18.478 billion and represented 104,94% of GDP, demonstrating a clearly upward trend.
On an individual level, the weight of this burden is overwhelming. In 2024, per capita debt skyrocketed to $105.364 per person , making Americans the second most indebted nation in the world. To put this in perspective, a decade ago, in 2014, each person carried about $58.005, meaning that debt per citizen 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 US government itself and various administrative entities, which own almost half of the total. Essentially, they are lending money to themselves, a process known as debt monetization, which is also very common in Europe.
As for foreign capital, it represents approximately 24% of the total. Japan leads the list of external creditors with $1,06 trillion, followed closely by China with $759.000 billion. Although China has reduced its holdings since its peak in 2010, both remain key players. By early 2025, the amount of debt held by foreigners reached a record $8,8 trillion.
Risks, rating agencies and outlook
It's not all optimism. Agencies like Moody's, Standard & Poor's, and Fitch have downgraded the US credit rating at various times, even stripping it of its coveted AAA rating due to the chaos in economic policy and the growing deficit. This could, in theory, make the country more expensive to finance if investors start demanding higher returns for the increased credit risk.
Furthermore, there are fears that powers like China or Japan will use their Treasuries as a tool for trade pressure , selling 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 2026. Longer-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 interest payments force the government to issue more debt to repay existing debt, a drastic reduction in the public deficit and superfluous spending would be necessary. Likewise, 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 teeters on a precarious balance between its global hegemony and an exorbitant public debt that has reached historic highs, even surpassing the peak of 126% of GDP seen in 2020. With per capita debt continuing 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.