#2 is also correct:
But there's one little problem with that conventional wisdom: it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt.
•Hong Kong: $121.9 billion (0.9 percent)
•Caribbean banking centers: $148.3 (1 percent)
•Taiwan: $153.4 billion (1.1 percent)
•Brazil: $211.4 billion (1.5 percent)
•Oil exporting countries: $229.8 billion (1.6 percent)
•Mutual funds: $300.5 billion (2 percent)
•Commercial banks: $301.8 billion (2.1 percent)
•State, local and federal retirement funds: $320.9 billion (2.2 percent)
•Money market mutual funds: $337.7 billion (2.4 percent)
•United Kingdom: $346.5 billion (2.4 percent)
•Private pension funds: $504.7 billion (3.5 percent)
•State and local governments: $506.1 billion (3.5 percent)
•Japan: $912.4 billion (6.4 percent)
•U.S. households: $959.4 billion (6.6 percent)
•China: $1.16 trillion (8 percent)
•The U.S. Treasury: $1.63 trillion (11.3 percent)
•Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.
cnn
