4 Facts You Should Know About National Debt and Default

By Steve Mencher, October 14, 2013 06:09 PM

In all of the turmoil about a possible U.S. default on its $16.8 trillion debt, there's an overload of information to follow. Here are four tidbits that you might have missed.

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1. China does not "own our debt." Yes, it does hold an IOU from the United States for about $1.28 trillion, making China Uncle Sam's largest overseas creditor. But that represents only 7.6 percent of the nation's debt.

2. The U.S. Treasury owes 28.4 percent of its debt, or about $4.76 trillion, to other arms of the federal government. The single biggest creditor? Social Security's two trust funds, which together hold $2.76 trillion in U.S. Treasury securities, the Pew Research Center reports.

3. If the government defaults on debt, nobody really knows how Social Security checks or Medicare would be affected. "Since we've never had a default, it's unclear what would happen with Social Security - and all payments," says David Certner, AARP's legislative policy director. And this from Treasury Secretary Jack Lew: "If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations - including Social Security and Medicare benefits."

4. The U.S. government has raised or adjusted the debt limit 78 times since 1960. It happens no matter which party holds the White House or Congress.

Want more?

See a Washington Post graphic that illustrates revenue and spending from 1981 to 2011 (Reagan to Obama).

And NPR has created a telling graphic that illustrates all of the U.S creditors: