Who is the debt owed to

What will they do if it was repaid

Why do people keep lending money to the US government if they think it's a problem

thesuitonym 15 hours ago | parent | next [-]

The debt is owed to other countries, and private bond holders.

They can request their money back, refuse to purchase future bonds, and if things get really dire, potentially go to war with the US (Don't worry, this is beyond unlikely).

Historically lending money to the US government has not been a problem. It's been a low earning but guaranteed return. Many of those loans have very long terms, and so even if it's a problem today, it wasn't when the loans were initiated, and it might not be when loans issued today come due.

Government debt is not like personal debt, for a lot of reasons that I am not smart enough to explain.

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franktankbank 15 hours ago | parent [-]

> Don't worry, this is beyond unlikely

Ch-eye-na

	▲	bilbo0s 14 hours ago \| parent [-]
		China doesn't hold that much of a percentage of our debt any longer. Somewhere around USD700B. Of the USD39T, that's obviously not that large of a lever. Pretty sure the Chinese have been implementing a policy of diversification at a minimum. (Probably a more likely explanation is they are implementing a policy of delinking and not just diversification, because the share of US Treasuries they seem to be willing to hold keeps dropping.)

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derektank 15 hours ago | parent | prev | next [-]

They continue lending to the US government because they are demanding a higher rate of return. The risk premium (i.e. the problem) is priced in.

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margalabargala 15 hours ago | parent | prev | next [-]

Structurally a large chunk of the debt is owed to a different part of the federal government, the Federal Reserve.

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insane_dreamer 15 hours ago | parent | prev [-]

That's an important question, and why US Gov Debt is different than Japanese Gov Debt, which also has a higher debt-to-GDP ratio than the US (due to decades of "zombie economy").

About 90% of Japan's debt is held by Japanese themselves, so it's much more insulated from a crisis that can't be resolved through domestic economy policy. (It could in theory print its way out of it.) Whereas about 25% of US gov debt (which is 3x Japan's in nominal terms) is held by foreign governments, including very large amounts by China. This, combined with the US being the main currency used for international transactions, gives those countries leverage over the US economy (though selling off the treasuries would impact their own holdings as well), and conversely means that US monetary policy has a global effect.