You hear this thrown around just about every day coming out of every pundit’s mouth, but what are the real numbers? First you need to know there are basically two types of public debt - public and intergovernmental.  Public debt is a mix of t-notes, savings bonds, t-bills, etc.  This is the debt that is owned by foreign countries.  Intergovernmental debt consists of medicare obligations, military retirements, the FDIC program, etc.  According to the Treasury Department as of May 2008, there was $5.3 trillion in public debt and $4.1 trillion in intergovernmental debt.

How much can we spend?  Congress sets the limit.  Congress just raised the debt ceiling in September of 2007 by $1 trillion dollars, raising it to $9.815 trillion from $8.965 trillion.  From the May 2008 numbers above you can see we quickly used our new credit limit.

To get an idea of who owns the public debt, let’s look at t-notes.  The US Treasury department released a report of major foreign holders of Treasury Securities.  As of May 2008, there were $2.6133 trillion dollars in outstanding Treasury Securities.   Here are the top 4 foreign owners by percentage:

1. Japan owns $578.7 billion, or 22.1%.
2. China owns $506.5 billion, or 19.4%. 
3. The United Kingdom owns $272.5 billion, or 10.4%. 
4. The next category is oil exporters that own $164.3 billion or 6.3%.  The oil exporters category includes Qatar, Oman, Kuwait, Iraq, Iran, Bahrain, Indonesia, Venezuela, and Eqcuador.

Next time you are at a cocktail party, you can whip this out over a frozen margarita.