How America owes the world

THE GLOBALIST QUIZ

April 8, 2007

US federal debt reached $11.4 trillion in late 2006. Of that amount, $3.2 trillion — or 28 percent — is held by foreigners. How much does the US government have to spend each year just on interest payments to its foreign creditors?

A. More than 1 percent of US gross domestic product
B.More than $1 for every American, every day of the year
C.More than combined spending on child nutrition, food stamps, and foster care
D. All of the above

A. More than 1 percent of US gross domestic product is correct.

With high levels of borrowing and rising interest rates, US interest payments on foreign-held debt are estimated to have grown to $125 billion in 2006, according to Bank of America. That figure is equivalent to about 1 percent of the total size of the entire gross domestic product of the United States, the world's largest economy.

B. More than $1 for every American, every day of the year is correct.

In total, interest payments on US government debt held by foreign investors reached $113.6 billion in 2005, the last year for which official data are available.

Put another way, the United States currently spends more than $310 million paying its foreign creditors each day. That, in turn, comes to slightly more than $1 daily for every man, woman, and child in the country today.

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