The distant country owed more than $12 trillion by the U.S. - “They owe us a lot because the war debt was never paid”

For nearly two and a half centuries, the United States has overlooked an old, uncomfortable financial reality: an unpaid war debt to a small European country that once played a decisive role in securing its independence.

Given that current incumbent of the White House, Donald Trump, is all about getting back as much money as he can from other nations to “Make America Great Again” – he may find it’s not the best way of going about it but I’ll leave that for another article – surely he’d be up for settling any debts going the other way, right?

OK, you’re right, that’s the last thing on his mind, especially when we’re talking about a staggering $12 trillion. That would dwarf the entire annual budget of the U.S. government. Let’s delve back into the history books.

Which country does America owe trillions?

It’s quite often France that gets the credit for aiding the fledgling United States during the Revolutionary War, but there was another key player, one sometimes left in the shadows. ¡Hola España!

That’s right, under King Charles III, Spain not only supplied arms, money, and soldiers but also engaged the British directly, diverting their military resources away from the colonies. A significant part of this aid was orchestrated by Bernardo de Gálvez, the governor of Spanish Louisiana, who supplied rebels with weapons, uniforms, medicine, and even quinine to combat disease.

“They owe us a lot because the war debt was never paid”

Leonardo Cervera, author

Gálvez’s campaigns against the British in the Gulf of Mexico, particularly the Battle of Pensacola (1781), were crucial in weakening British control in North America.

Meanwhile, Spain financed American forces with millions of silver pesos – without which, many historians argue, George Washington’s army might not have endured.

Why does the U.S. owe Spain $12 trillion?

Spain’s aid was meant to weaken Britain, but it’s worth noting that it was not as a gift to the colonies. But unlike France, which was later compensated through the Louisiana Purchase, Spain never saw repayment. As I stated earlier, historians estimate that adjusting for inflation and interest, this unpaid debt now stands at $12 trillion, making Spain, at least on paper, the U.S.’s biggest foreign creditor.

Will the U.S. ever acknowledge this debt?

Mañana, mañana. That seems to have been Spain’s stance as the nation has never pursued repayment, and it’s unlikely the U.S. would ever recognize it anyway. Still, the debt remains a striking historical anomaly.

In 2014, Gálvez was posthumously granted honorary U.S. citizenship for his contributions to American independence - but symbolic gestures aside, maybe the E.U. will find a few trillion reasons to remind J.D. Vance and co. about ‘free-loading’.

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