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Many government agencies hold this debt, such as Social Security and federal retirement funds.
Source: Federal Reserve Bank of St. Louis
Image: Courtesy
U.S. federal debt is over 120% of GDP.
This is high by historical standards: After World War II, U.S. federal debt was only 113% of GDP and 20 years ago it was only about 60%.
Many government agencies hold this debt, such as Social Security and federal retirement funds. About $7 trillion. The rest is held by the public, including the Federal Reserve. About $28 trillion.
Foreign central banks and investors also help absorb U.S. national debt. Their holdings doubled from about $4 trillion in 2010 to over $8 trillion in 2024.
Check the FRED Blog for the data and discussion about national debt and this Page One primer for the basics and background.
And then there’s Japan…
In 2023, Japan’s national debt-to-GDP ratio was 195%, the highest among advanced economies. It’s mainly from persistent fiscal deficits and near-zero economic growth, both largely driven by Japan’s rapidly aging society. That is, their falling fertility rate and rising life expectancy.
Japan makes deliberate policy choices to manage this debt. For example, to provide social security benefits, they issue bonds rather than draw down their social security reserves. They invest social security reserves in high-return, risky assets such as equities and foreign bonds. And those reserves have grown—from 36% of GDP in 1997 to around 60% of GDP in 2023.
Read the blog post for a summary or the academic paper for the technical details. Or take 3 minutes to check out this video from last year.
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Private debt is about 140% of GDP.
Private debt is larger than federal debt and typically at greater risk for nonpayment. Delinquency rates can provide a gauge of that risk: Credit card delinquency rates, for example, are higher now than during the pandemic but lower than during the Great Recession.
Credit card and business loan delinquency rates increased substantially in the 1990-1991, 2001, and 2008-2009 recessions. More importantly, though, they began rising several quarters before the recessions started.
So, do delinquency rates predict downturns? Delinquency can certainly rise without a recession: In 2016, for instance, business loan delinquency rose, but no recession occurred until 2020. From 1994 to 1996, credit card loan delinquency rose, but no recession occurred until 2001.
So take it with a grain of salt, but check out the data timeline of credit card and business loan delinquency rates in the FRED Blog. And check this Page One primer for the basics and background on household and corporate debt.
