Where Does the U.S. Borrow Money From?

by Kelsey Butler ; Updated September 29, 2017
To borrow money and manage the debt, the Founding Fathers created the U.S. Treasury Department.

When the U.S. Government spends more money than it collects from taxes, it borrows money from other branches of government, individuals, corporations and foreign countries. Anyone can buy debt from the U.S. in the form of bonds. If an investor buys a bond for a certain amount, the Government promises to pay back that amount plus interest.

Domestic Investors

The U.S. Government borrows money from private citizens by selling debt in the form of savings bonds, and it borrows from large privately owned banks and pension funds. Public holders of Government debt include state and local governments. The Federal Reserve also owns some of the debt.

International Investors

The U.S. borrows the greatest amount of money from other countries, or international investors. This includes private investors from outside the U.S. and institutions run by foreign governments, such as national banks and investment funds.

About the Author

Kelsey Butler is pursuing a master’s in pharmacology at the University of Vermont. She previously majored in psychology with a double minor in chemistry and pharmacology, and hopes to pursue a career in medicinal chemistry.

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