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Who Owns Our National Debt?

Morgan Housel
December 11, 2012

Former Sen. Alan Simpson has arguably done more to address our fiscal problems than anyone else in the last three years. He was co-chairman of the president's deficit-reduction committee, commonly known as the Simpson-Bowles budget plan. He's a good man on a good mission.

But he doesn't always get it right. Here's Simpson last week on The Daily Show with Jon Stewart talking about the fiscal cliff:

There's a group out there that doesn't give a damn about Republicans or Democrats or the president, and it's the people we owe $16 trillion to. Half of that is owned by private people -- people in New York or Cody, Wyoming. The other half is owned by feds, and half of that is owned by China.

Time out. I like you, Alan, but let's get the facts right.

China doesn't own a quarter of our debt. It doesn't even own 10%. When the latest data comes out, it probably won't even be the largest foreign creditor. (That title will go to Japan.) China has actually been a net seller