posted on Sep, 19 2010 @ 04:55 AM
The interest on the federal debt is paid to any person or entity that holds U.S. debt in the form of treasury bills, treasury bonds, and treasury
notes. So that includes American citizens who purchase those treasuries, foreign individual investors that purchase those treasuries, as well as
national governments, our own federal reserve, etc., etc.
One of the largest holders of U.S. debt is the Social Security Trust fund. You always hear that congress raided it, and that the money is gone.
That's not quite accurate. Congress borrowed the money by having Social Security use its funds to purchase treasuries. So by law, that money is
going back into Social Security come hell or high water. Either that, or the country defaults on ALL of its debt.