[hove]

OK Nick...you seem like a smart guy. Answer me this. Congress passes a budget that exceeds incoming taxes received. This is called a deficit. Each year the deficit accumulates....that is called the "Debt". Each year, a percentage of our budget is interest on that debt. Like if I don't pay my credit card....I have to pay more interest to the lender. Now I understand that the American people have to pay several hundred billion $ per year for interest on our collective debt. So my question is.....who is Americas lender? And who gets that interest money each year?

[Torie]

So my question is.....who is Americas lender

Those that hold treasury bills and bonds, and arguably, the social security trust fund via accounting entries. I'm a holder myself.

[Rodney King]

Now I understand that the American people have to pay several hundred billion $ per year for interest on our collective debt. So my question is.....who is Americas lender? And who gets that interest money each year?\

The people who buy U.S. Treasury Bills.

[Nick Danger]

who is Americas lender? And who gets that interest money each year?

You can figure that out by going here, here and here.

The first one takes you to the Treasury Department, where you learn that the Treasury Department sells securities at more than 150 auctions held throughout the year. Anyone can place a bid. You can even buy them yourself, at a site called TreasuryDirect.

The second one takes you to the Bureau of Public Debt, where you find out that the Total Public Debt Outstanding is $3.4 trillion (as of Nov. 30).

The third takes you to a page where you can download a pdf of the Federal Reserve's annual report. On page 320 of that, you can see that all the Federal Reserve Banks combined hold $518.5 billion in U.S. Treasury Securities. In other words, they hold about 15% of the outstanding Treasury debt. The rest is held by the public.

Who gets the interest? Whoever owns the bonds. You could get some, just buy some treasury bills. Lots of people do. Lots of people also hold them indirectly, through money-market funds and the like. Most people keep the interest. The Federal Reserve does not; anything it has left after paying expenses is rebated to the Treasury. In most years this is about 85% of what it takes in.

Note that I did not "know" any of this. I looked it all up, in about three minutes, using Google. Anyone else could have done the same thing. This stuff is just not mysterious; I don't know why people talk as if all this stuff is shrouded in secrecy.