The Pour Over Today - The US Just Hit $40 TRILLION in Debt... Who Do We Owe?

Episode Date: August 22, 2026

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I actually thought this was a fun topic. I didn't know how I was going to feel about it. I know. When I was initially researching it, like trying to wrap my head around it was a little bit difficult. But then as I was getting into it, I was like, this is actually, this is so fun. Hey, it's Kathleen. And this is Catherine Ann. Welcome to TVO Explains, where we provide news context for normal people. On Monday, Wednesday and Friday, as you know, we summarize the day's biggest headlines. But as we're writing about different topics, we are. always come across something that we need to learn more about. So on Saturdays, we take a shallow dive into one topic from the week to educate ourselves and bring you along with us. K.A. writes our explainers, so she's going to read through today's newsletter, and then I have some questions for her. So feel free to follow along with your eyes or listen along with your ears. Let's go, KA. So today we were talking about national debt because Uncle Sam's IOU just hit $40 trillion for the

first time ever. Our national debt has never been that high before. So I know the face everybody made in the government too probably when it happens. We all crossed that milestone. We never wanted to never wanted to hit. So what do we mean by national debt? So national debt is the total amount of money the federal government has borrowed to pay its bills. When government spending outpaces revenue like taxes, a budget deficit is birthed. The government borrows to cover. it, and if it's not paid back quickly, that baby deficit grows into a big adult deficit. And national debt is just the running total of all those unpaid deficits stacked up. So who does the US owe money to? Lots of people. Similar to how an individual's total debt might

consist of credit cards, a car loan, and a mortgage. The government's debt consists of two different types, debt held by the public, and intra-governmental debt. So debt held by the public makes up about 80% of national debt. It refers to all the money borrowed from outside lenders. The government does this primarily by selling treasury securities. So like that bond fund in your 401k earns money because the government is paying you interest for loaning it money. They sell them to things like mutual funds, state and local governments, and even individuals. And then foreign investors hold roughly 29% of debt held by the public, which is about $9.3 trillion. Okay, sorry to interrupt.

Who, when we say foreign investors, I feel like most people think China. But what's, do you know the breakdown? Yes. So there's a decent list of countries we owe to. Japan actually owns, is the biggest foreign investor that we have. China is on the list, but we don't just like owe all of our money to China. And foreign investors, since they only make up, like all of them together make up 29% of debt held by the public, it's not like China makes up 29% of debt held by the public. It's Japan and China and the UK and Cayman Islands and all of these other countries. And then there's even like a category for like other countries that are just a bunch of small ones that don't own that much. Interesting. Enough to even be named. So it's interesting when you actually get into.

the specifics. And then there's intergovernmental debt, which makes up 20% of national debt and is debt that Uncle Sam owes to himself. Yes, you can do that. So for example, if the U.S. needs money to fund a war and they take it out of the Social Security Trust Fund, that would be an example of intergovernmental debt. So why does our debt keep growing? There are lots of reasons, but some of them include tax cuts, which equal less revenue to Uncle Sam, spending increases. So think on things like Medicare, Social Security, and foreign wars, recession responses, think COVID relief checks, and rising interest rates. Right now, the U.S. pays about $1 trillion in interest annually, which is wild. I know. So why can't Uncle Sam just cancel his own debt? Because that just,

that makes it someone else's problem. The real lenders holding that money would lose it overnight. Cancelling intra-governmental debt would gut the trust funds it's held in. So think Social Security, leaving less to pay out the people counting on those funds. And then no one would loan Uncle Sam money again. I think that was the hardest part for me is the whole part. Like, why can't we just cancel it? I mean, I actually understand more why we can't just cancel the intergovernmental debt. Like, sure. You got to, you got to, you know, reimburse. that to the Social Security Fund so that you can get people their Social Security checks. But, I mean, do we really need to pay Japan back? But then, of course, like, when I think about it,

I'm like, okay, yeah, that's probably, it's probably smart. If we ever want Japan to give us money again, then, yes, we need to pay Japan back. Or not be, like, really mad at us, you know. Okay, so did anything that you read while you were researching for this contradict what you assumed going in? Well, probably, yes. I just didn't really know much about national debt. Specifically, intergovernmental debt, I didn't realize was a thing. I kind of just assumed that debt meant we borrowed from outside lenders. And then in my head, probably like a lot of people, I thought, well, that's other countries.

That's not like the government itself or the American people probably. I think I maybe thought, like, large American corporations probably help us out. But when I was thinking, I was like, it's probably mostly to, like, the UK or to China or to Japan. And then to actually look at the breakdown and see, like, oh, like, U.S. investors actually own the bulk of the debt. That was interesting to me. What about something that you, maybe another thing you thought that was interesting or something you wanted to write about that didn't get included? Hey, it's Steph, a writer for the pourover. You know what they say about August.

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Well, there's lots of things we could talk about with national debt, but one thing I thought was interesting is there's actually a debt ceiling that is set by the government. And when the government hits that threshold, they're not allowed to go into more debt. And I didn't look much further into it than that because I was like, we don't have room to talk about the debt ceiling. But I was like, that's so interesting that there is a debt ceiling. It is. And they have to vote on it, right?

It has to be approved by Congress. So if they hit the ceiling, which I think right now, do you know our current ceiling? I don't. Do you? It's like $41 trillion. So we're getting close. We're getting there. And so if we were to hit it, they would have to pass a new ceiling, which I

I vaguely remember the last time they had to do that. And I thought I had that thought of like, well, that's weird. We have to just say we can't spend any more money until we approve spending more money. I don't know. That is a whole other can of worms. You could write about what is the debt ceiling? Let us know if you want us to write about that. Okay, do you have any fun facts?

Yeah. So actually, I was looking at like breakdowns of U.S. national debt compared to other national debt. And first of all, almost every country. carries national debt. There are some like smaller countries that might balance their budgets, but for the most part, every country carries national debt. So it's not like just us. Yeah. Interesting. We are number one, you know, in the world for national debt. But China is second. They have $18.7 trillion in national debt. And I thought it was interesting. The breakdown of our national debt comes out to 116,800.

$134 per person living in the U.S. Wow. First of all, I cannot be held responsible for that. I did not. I did not sign up. You don't want to be $117,000 in debt for Uncle Sam? No. Not to Japan.

I didn't get to go anywhere. I didn't get to do anything. Did you see while you were looking at the lists, the lists? Like, does Japan owe the U.S. money and the U.S. the US owes Japan money. Can we not just... That's a good question. I would... I mean, probably. I don't know going the other way, like if Japan owes the U.S. money, but my gut says they probably do. And that's a good question. Maybe it's like a currency exchange issue. It's just tied up.

Oh, yeah, probably. In the ATMs. They're probably working on it. Yeah. Okay, I did have a fun fact, too. So our little intro to the news. letter talked about, listen, this is not new. The U.S. has held debt since it was a country, right? It's actually false. There was one time that the U.S. had zero national debt. Did you know that? Yes, I did. It was right before, it was the late 1800s, right? Well, I don't know, because now I have to decide, am I in my late 30s or my mid-30s? 1835, President Andrew Jackson.

Okay, thank you. President Andrew Jackson achieved his goal of entirely paying off U.S. national debt. So I think I'm going to link to something about this in the newsletter, but I spent some time reading about it this morning. And it was just like very interesting. He campaigned saying, I want to eliminate the national bank, which we've written about, the Fed, right? And I want to eliminate our debt, and he did it entirely within three years. And then two years later, there was a bank run. So, but there was one time when we had no debt. And then I have a

fun little graphic of how much it's changed since then. Which I cannot wait to see. I know. You know, we've been making a lot of fun graphics for stuff that we come across and thinks interesting or that we don't understand. So our readers might not need it as much as we do. They're a little bit smarter than we are probably, but, or me. I'll speak for myself. But like, you know, yesterday we were writing about the national debt and like, what does $40 trillion even look like?

And it was fun to come up with different ways to visualize that. So we've been putting a lot of those links in our newsletter, but we'll try and include them on the podcast notes too. Or you can sign up for free for the newsletter and double down. That is true. Okay, Kay, let's talk about Christian perspective. Yeah. So, no matter your thoughts on national debt, Christians are called to manage their own finances wisely and to live generously, giving to those in need.

So pray for guidance in doing both. I think we can look to 1st Timothy, chapter 6, verse 17, which says, instruct those who are rich in the present age not to be arrogant or to set their hope on the uncertainty of wealth, but on God, who richly provides us with all things to. enjoy. Thanks Kay. I feel like anxiety comes up a lot when people talk about finances. So before we go, let's take a moment to pray a prayer for freedom from anxiety. Good Father, when we come to the headlines, we so easily spiral into anxiety about tomorrow. What will be in our bank accounts? Who will be in the White House? What kind of world we are creating? But your word interrupts the spiral with your promise. You know what we need and you will provide. Help us to rest in your power and goodness to seek your kingdom first no matter what today holds, knowing that our good father sees us and will weave

everything beautifully for our good and his glory. In Jesus' name, amen. If you enjoyed this episode, make sure to like and subscribe. You can find all of our past explainers as well as our Monday, Wednesday, Friday news summaries on YouTube, Spotify, Apple Podcasts, or wherever you get your podcasts. So until next time, bye. The other day in the kitchen, I poured citrus element powder in my water bottle. My wife looked at me and asked when the last time was that I drink water without element. I looked at her and couldn't even remember. No sugar, no crashes,

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