Final answer:
The largest portion of the U.S. national debt is owned by the federal government itself (A). Foreigners also own a sizeable portion, but less than the government. State and local governments and the private sector own the rest of the debt.
Step-by-step explanation:
The owner of the largest portion of the U.S. national debt is the federal government itself, which holds the debt through various government trust funds and accounts. The private sector, including U.S. citizens and businesses, also holds a significant portion of the debt, while foreign investors, businesses, and governments are indeed major buyers of U.S. federal debt, accounting for a substantial share of it. However, the largest single portion is owned by the federal government through intra-governmental holdings.
This debt, when held by the government itself, is considered a public debt and crucially does not have the same impact as private debt. When the government owes the debt to itself, it manages it by issuing more bonds or through taxation, redistributing the money within the economy. In contrast, the portion of the U.S. national debt owned by foreigners - between 15-20% - does represent a loss of purchasing power from the U.S. economy, as this money will be paid out of the country.