Since it looks like we’ll be hearing about the debt ceiling all week (unless the Senate comes up with a rescue plan between this Sunday night writing and Monday morning), it is useful to remind ourselves who the US owes money to:
China owns $1.3 trillion in US debt, but Social Security owns $2.6 trillion. As noted on the chart, Social Security and other government account debt is meant to represent surpluses in various trust funds. The debt held by these trust funds aren’t accounted for as a liability in the government books, but there is no doubt that these Treasuries are legal debt.