The U.S. federal government’s gross debt reached $31.4 trillion by the end of 2022, with $24.5 trillion (78%) held by the public and $7.0 trillion (22%) in intragovernmental debt. Domestic investors hold about two-thirds of the public debt, with the Federal Reserve being a significant holder. Foreign investors, including Japan and China, hold 30% of the public debt. High public debt levels pose economic risks, including reduced private investment, higher interest rates, and potential fiscal crises. Intragovernmental debt primarily resides in government trust funds like Social Security.
High levels of federal debt can negatively impact the economy in several ways. It can reduce private investment by crowding out private borrowers, leading to higher interest rates. This increased borrowing cost can slow down economic growth. Additionally, a large debt burden limits the government’s flexibility to respond to economic crises and could potentially lead to a fiscal crisis if investors lose confidence in the government’s ability to manage its debt. Managing and reducing the debt is crucial for maintaining economic stability.
source: https://www.pgpf.org/blog/2023/05/the-federal-government-has-borrowed-trillions-but-who-owns-all-that-debt
