Who owns the public debt?
from Jonathan Nitzan
While soaring public debts have been front and centre in both the popular media and academic discussion, there is surprisingly little analysis of who owns those debts. One exception is the work of Sandy Hager, a postdoctoral fellow at the Harvard Weatherhead Center for International Affairs. Hager’s PhD dissertation dissected the personal and corporate ownership of the U.S. public debt, showing a remarkable degree of concentration.
The chart below, taken from his 2013 article in New Political Economy, shows the share of the U.S. public debt held by the Top 1%. This share follows the general historical contours of the overall distribution of wealth, and is currently hovering around 45% – approximately the same level as at the turn of the twentieth century.
Equally startling is the extreme concentration of debt holdings by corporations. The enclosed table, taken from Hager’s 2015 paper in Socio-Economic Review, shows that, in the first decade of the millennium, 2,675 firms – representing a tiny 0.05% of all corporations – owned a whopping 82% of the public debt held by corporations. This concentration is significantly higher than it was in the 1950s, when a similar number of firms, representing 0.2% of all corporations, owned 66% of the debt held by corporations.
Although the full implications of these findings are yet to be explored (Hager only begins to do so in his work), it seems clear that any analysis of public debts has to take them into account.
Shimshon Bichler and Jonathan Nitzan