Amid these turbulent economic times we have seen many changes, not least of which is the change in the U.S. National Debt. The debt, which has been steadily climbing since the beginning of the last century, has, of late, taken an unprecedented surge.

From January of 08 to February of this year the debt increased by 35%, adding $3.2 trillion to the $9.2 trillion figure recorded then, bringing us to the present figure of $12.4 trillion. The debt has more than doubled since 2000, is almost four times its 1990 level and multiplies the 1980 number more than 13 times.

To help put these numbers into perspective, in 1990 the national debt was equal to about 56% of the Gross Domestic Product (GDP), which (supposedly) measures everything that is produced in the country that year. In 2000 the total was about 58%. Today, the debt is equal to 84% of GDP.

Even more striking, is the annual percentage change in the debt. Between 2002 and 2006 there is a surge in growth, presumably to fund the wars in Afghanistan and Iraq, peaking in 2003 at around 9%, but the growth begins to slow down again until 2008, when it surges over 11%, and then in 2009 it jumps to almost 19%.

Another factor worth considering, is who owns this debt. As of December 2009 about 34% of the debt was owned by foreign countries. The Republic of China is the leading holder of U.S. National Debt with close to $900 billion, representing 8% of the total debt.

The Washington Times reports that these numbers may not, in fact, be all that accurate. While they account for securities directly held by foreign governments, they don’t track holding of debt through intermediaries in other jurisdictions.

“The U.S. Treasury data almost certainly understate Chinese holdings of our government debt because [the U.S. figures] do not reveal the ultimate country of ownership when [debt] instruments are held through an intermediary in another jurisdiction,” Simon Johnson, an economics professor at the Massachusetts Institute of Technology, told the U.S.-China Economic and Security Review Commission, a bipartisan forum established by Congress in 2000 to monitor the security implications of the U.S. economic relationship with China.

Mr. Johnson told the commission last week that “a great deal” of last year’s $170 billion increase in Treasury holdings by the United Kingdom “may be due to China placing offshore dollars in London-based banks” and then using the funds to purchase Treasury debt.

In the end it seems that the government is banking on a quick turnaround so that it might be able to slow the growth of the debt, as, after all, there is only so much money available out there for us to borrow. It’s a mathematical certainty that any sustained rate of growth cannot go on indefinitely, as there is always an upper limit to what the market will bear. When that limit may be reached is difficult to say, but what is certain is that the higher rates of growth we have seen of late can only work to hasten our arrival at that limit, whatever it may be.

Data Sources: www.treasurydirect.gov, www.worldbank.org, www.bea.gov, www.treas.gov

Carlton Smith is a Project Manager and Programmer living in Southeast Michigan. He is also the founder and Executive Editor of the web literary magazine Troubadour21.com. His blog can be found at UncleSol.net. Email Carlton at carlton@unclesol.net