What would happen if the US paid off its debt?

If the U.S. paid off its national debt, it would trigger an economic catastrophe by eliminating safe, interest-bearing investments (Treasury bonds), causing capital flight, freezing bank lending, slashing money supply, and forcing massive tax hikes or spending cuts, leading to a severe depression as these bonds are crucial for global finance and retirement savings. The national debt isn't just owed to foreigners; it's a massive pool of savings, and removing it would remove the bedrock of the financial system, stopping savings accounts and pension funds from functioning.

Who owns over 70% of the US debt?

Who owns the most U.S. debt? Around 70-80 percent of U.S. debt is held by domestic financial actors and institutions in the United States. U.S. Treasuries represent a convenient, liquid, low-risk store of value.

What would happen if the US stopped paying the debt?

So, in a practical sense, Social Security and federal pension payments might cease; federal agencies would furlough employees; vital economic services such as the post office, Transportation Security Administration, U.S. Customs and the Federal Aviation Administration would stop without an emergency stopgap measure by ...

Is it possible for the US to get out of debt?

While the U.S. technically could pay off its massive national debt, it's highly unlikely due to political hurdles and the sheer scale of required budget cuts or tax hikes, with most economists suggesting managing it via economic growth, fiscal adjustments (taxes/spending), and debt refinancing, rather than full repayment, as countries issue debt in their own currency and can effectively manage it long-term. 

Who owns most of America's debt?

Most U.S. debt is owned by domestic entities, primarily U.S. government accounts (like Social Security), the Federal Reserve, and private investors (banks, mutual funds, individuals), while foreign investors (especially Japan and China) hold a significant portion, making up roughly 20-30% of the total debt held by the public. The largest single owner isn't a foreign country, but rather U.S. government agencies and the Federal Reserve.
 

What REALLY Happens If US Pays Its $37 Trillion Debt

What percent of Americans are 100% debt free?

Roughly 23% of Americans are completely debt-free, according to Federal Reserve data, though this varies significantly by age, with younger adults more likely to have no debt and older adults (over 77) also seeing higher rates, while middle-aged groups carry the most debt. While many strive for financial freedom, studies show fewer than 1 in 10 Americans feel truly financially free, with most struggling to make ends meet or having significant financial burdens like mortgages or credit card balances. 

Who has the most debt on Earth?

The United States has the world's largest government debt in absolute terms (over $38 trillion as of late 2025), followed by China and Japan, but Japan has the highest debt relative to its economic size (GDP), exceeding 230% of GDP, making it the most indebted nation when considering debt-to-GDP ratio. Countries like Sudan, Japan, and Singapore have very high public debt as a percentage of GDP, while the U.S. leads in total dollar amount. 

What country is deepest in debt?

There isn't one single "worst" debt country, as it depends on the metric: Japan often leads in debt-to-GDP ratio (government debt relative to economic size), while the United States has the largest absolute national debt and significant external debt, though its large economy helps manage it. Other countries with high debt-to-GDP ratios include Sudan, Lebanon, and Venezuela, often due to instability or specific economic challenges.
 

What happens if the US can't pay off debt?

Considering most debt is held by domestic investors, it would mean a massive drop in wealth as those debt holders are now left without any value. Massive drop in aggregate demand which results in a massive recession or worse. Foreign borrowers also lose out, so contagion to the world economy spreads.

Is Trump going to forgive tax debt?

There is no IRS forgiveness plan officially introduced by Trump in 2025. While some campaign proposals have discussed tax simplification or reduced rates, they do not include debt cancellation for individuals with unpaid taxes.

Is the national debt actually a problem?

Yes, the U.S. national debt is widely considered a significant problem by economists and fiscal experts, as it's on an unsustainable path, growing faster than the economy, raising interest costs (now exceeding defense spending), potentially crowding out private investment, risking dollar stability, and limiting future fiscal flexibility for crises, though some argue the U.S.'s unique status as issuer of the reserve currency offers some buffer. 

When was the last time the government shut down?

The length of shutdowns vary, as they last until Congress passes and the President signs the appropriations bills to fund the government. The most recent shutdown occurred in 2018-2019 and lasted 35 days.

What happens if you flee the US with debt?

If you have debt in the U.S., it usually won't disappear when you relocate. Creditors may still try to collect, and unresolved issues could resurface if you return home.

Why doesn't China call in US debt?

Treasury bonds are freely traded financial instruments, China cannot —nor can any other creditor—simply demand a repayment at their will. Additionally, because the U.S. controls its own currency, it has the ability to manage its debt through fiscal and monetary policies.

How much does China owe the USA?

China holds a significant amount of U.S. debt, holding around $759 billion as of late 2024/early 2025, making it one of the largest foreign holders after Japan, though its holdings have decreased from past peaks. China's share of the total U.S. debt is relatively small (a few percent) and has been declining as China reduces its holdings and diversifies into other assets like gold, but it remains a major creditor. 

What is the highest US debt ever?

The highest U.S. national debt ever reached is over $38 trillion, a milestone surpassed in late 2025, with recent figures showing it near $38.3 trillion by December 2025, marking the fastest accumulation of $1 trillion in debt outside the pandemic era. This growing figure reflects annual deficits, with recent increases driven by factors like pandemic relief and policy decisions, raising concerns about long-term fiscal stability, though debt relative to GDP (Debt-to-GDP ratio) provides a better measure of the debt burden. 

How many Americans are 100% debt free?

Roughly 23% of Americans are 100% debt-free, according to recent Federal Reserve and WalletHub data, a figure that accounts for all debt types, including mortgages, student loans, and credit cards. While many aspire to be debt-free, considering it a key part of financial success, a significant portion of the population carries some form of debt, with higher rates of unsecured debt among younger adults but more significant amounts among older groups, note YouGov and ACA International. 

Can the U.S. ever be out of debt?

While the U.S. technically could pay off its massive national debt, it's highly unlikely due to political hurdles and the sheer scale of required budget cuts or tax hikes, with most economists suggesting managing it via economic growth, fiscal adjustments (taxes/spending), and debt refinancing, rather than full repayment, as countries issue debt in their own currency and can effectively manage it long-term. 

How fast could the U.S. get out of debt?

Absent massive revenue increases – which President Trump has never mentioned – it would be literally impossible to pay off the national debt over the four years of the next presidential term, and practically impossible to pay it off over the ten-year budget window.

Which country has zero debt?

As the world's biggest gambling hub, Macao SAR has zero debt, bolstered by billions in gaming revenue and healthy financial reserves. Liechtenstein ranks in second, with virtually no debt and the only country in Europe ranking in the top 10.

What country owes the US the most money?

The country the U.S. owes the most money to is Japan, holding over $1 trillion in U.S. Treasury securities, followed by the United Kingdom and China, though the U.S. government itself holds the largest portion of its own debt through various trust funds. 

Who is the largest loan taker from the World Bank?

“India tops the World Bank charts—not for begging, but for building. $39.3B isn't debt—it's investment in the future. While others borrow to survive, India borrows to scale.”

How many Americans have $20,000 in credit card debt?

While exact, real-time numbers vary, studies from 2024-2025 suggest around 6% of all credit card holders have balances over $20,000, but this jumps significantly higher for specific groups, with 23% of those who have maxed out their cards owing over $20k, and it's a common threshold for those seeking financial help, reports Liberty Street Economics and PR Newswire. The New York Fed noted 6% of cardholders had balances over $20k in late 2023, while a Debt.com survey in March 2025 found 23% of maxed-out cardholders had over $20k in debt, highlighting that while not a majority, it's a substantial and growing concern, especially for those struggling to pay bills. 

Who does the US owe 36 trillion to?

The U.S. owes its $36 trillion national debt to a mix of domestic and foreign entities, primarily American investors, institutions (like pension funds, banks), the Federal Reserve, government trust funds (like Social Security), and foreign governments and investors, with Japan and China being major foreign holders of Treasury bonds. About two-thirds is held domestically, while the rest is owned by foreign entities, with Japan leading as the largest foreign creditor.
 

What single person has the most debt in the world?

The person widely considered to have the most personal debt in the world is Jérôme Kerviel, a former French bank trader who owes billions (around $4.9 to $6.3 billion) to his former employer, Société Générale, stemming from massive unauthorized trades in 2007-2008, making him an extreme case of personal financial obligation.