That includes $1.1 trillion held in Japan and $860 billion held in China, which are the largest foreign sources of financing the U.S. debt.
The Treasury Department said this week that it could run out of maneuvering room to keep paying the bills in early June, leaving the government bumping up against its borrowing limit. China held $860 billion as of January, but experts say the actual amount held by Chinese nationals is likely higher because Hong Kong owns another $226 billion and Chinese investors often purchase U.S. debt through tax shelters in Luxembourg or the Cayman Islands.
“A TARP moment seems likely, hearkening back to that dark day in autumn 2008 when Congress initially failed to pass the Troubled Asset Relief Program bailout of the banking system, and the stock market and other financial markets cratered,” Moody’s chief economist Mark Zandi told the Senate Banking Committee.
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