The only way the U.S. can spend the way it spends — which is to say, more than it earns — is by borrowing. A lot. And who it’s borrowing from makes a difference.
The U.S. is $31 trillion in public debt. That is, for reference, about as much as the entire U.S. economy produces in a year. We owe about 30% of that to other countries and foreign investors. That share has been falling.
“It used to be almost half of all publicly held debt,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center. The rest of the world is not propping up U.S. spending like it used to.
One reason is that there’s just a lot more of that spending.
“There’s been an explosion in the amount of U.S. government debt outstanding,” said Tony Rodriguez, head of fixed income strategy at Nuveen. “Think about all of the fiscal stimulus and tax cuts that we’ve seen over the last five to 10 years.”
The U.S. borrowed to deal with the Great Financial Crisis, then it borrowed to deal with COVID-19. Now it’ll borrow to pay for war. Significant tax cuts across multiple administrations — 2013, 2017, 2020, and 2025 — further engorged the debt.
Foreign governments’ desire to loan money to the U.S. by buying U.S. Treasurys has not kept up for many reasons.
“The U.S. fiscal sustainability has been called into question with debt rising as much as it has,” Rodriguez said. Standard & Poor’s downgraded U.S. debt in 2011, Fitch did so in 2023, and Moody’s and European credit rating agency Scope followed suit in 2025.
Some countries have observed that holding U.S. assets exposes them to financial pressure from the U.S.
“Central banks and non-U.S. investors have looked at the U.S. use of the dollar in terms of imposing sanctions, for example, on different investors. So the ‘weaponization’ of the dollar led central banks to want to insulate themselves from that geopolitical risk,” Rodriguez said.
