QUITE THE SURPRISE
The last piece of update the OIF cost estimates compiled here was a refinement based on interest paid to foreign holders of debt, rather than total interest.
For many economists, the economic cost of debt is measured solely by foreign interest paid. It doesn't seem quite representative to suggest that a highly levered economic system is the same as one with no leverage, so long as it is domestic financing; but one has to go with it, to a degree.
Anyway, pulling the figures, I found that foreign purchase of our national debt is a LOT higher than I suspected.
For every new dollar that was borrowed, how many dollars were borrowed from abroad? The ratio in table one answers that question.
Table 1. Ratio Foreign Bought (sold) to
Total New Public Debt Issued (retired)
Total New Public Debt Issued (retired)
| Fiscal Yr | Date | Ratio |
|---|---|---|
| FY2008 | Sep-08 | 0.85 |
| FY2007 | Sep-07 | 1.05 |
| FY2006 | Sep-06 | 0.40 |
| FY2005 | Sep-05 | 0.46 |
| FY2004 | Sep-04 | 0.92 |
| FY2003 | Sep-03 | 0.69 |
| FY2002 | Sep-02 | 0.92 |
| FY2001 | Sep-01 | 0.71 |
| Average | 0.75 |
These numbers might be higher than you often see (at least I thought so). It's probably because those other figures are measured against the total national debt, rather than the debt sold to the public.
There is a strong (and sobering) argument that the ratio here is the relevant one ...
