Does US government debt affect Americans who live abroad?
Yes, mainly through interest rates, the dollar's exchange rate and the long-term funding of federal programs such as Social Security. The Congressional Budget Office projected in February 2026 that federal debt held by the public will rise from 101 percent of GDP in 2026 to 120 percent in 2036.
The US government borrows by selling Treasury securities. In February 2026, the Congressional Budget Office projected public debt rising from 101 percent of GDP in 2026 to 120 percent by 2036.
Borrowing costs grow with the debt. The CBO projects net interest at about 3.3 percent of GDP in 2026, rising to 4.6 percent by 2036. It warns that heavy borrowing can push up interest rates across the economy.
Much of this debt is held overseas. US Treasury data show foreign holdings of $9.25 trillion in July 2026. That makes Treasury yields a reference rate for loans, savings and currencies around the world.
Americans abroad often earn income in dollars and spend in another currency. Changes in US rates and in the dollar's value can change what a Social Security check or pension buys locally. Moves can go in either direction.
Program funding is a separate channel. The 2026 Social Security Trustees Report projects combined OASDI reserves running out in late 2034. After that, about 83 percent of scheduled benefits would be payable under current law. Any change Congress makes would apply to beneficiaries in the US and abroad alike.
Sources
- The Budget and Economic Outlook: 2026 to 2036 · Congressional Budget Office
- Major Foreign Holders of Treasury Securities · US Department of the Treasury, Treasury International Capital
- A Summary of the 2026 Annual Reports · Social Security Administration, Office of the Chief Actuary
Written and reviewed by Todd Allyn, Founder, Sovereo Intelligence Research
Facts checked Oct 8, 2026 · Next review by Jan 8, 2027
How we source answers · Report an error · Plain-text version