The national debt is the total amount of outstanding borrowing by a country's federal government, accumulated over its history
. In the United States, the national debt was $34.02 trillion as of December 29, 2023
. The national debt is made up of different types of debt, such as that held by the public and intragovernmental debt
. Key aspects of the national debt include:
- Interest Payments : The federal government pays interest for the use of lenders' money, similar to how individuals pay interest on loans. The interest expense on the national debt depends on the total debt and various interest rates
- Deficit Spending : When the federal government spends more than it takes in, it has to borrow money to cover the annual deficit. Each year's deficit adds to the growing national debt
- Debt per Person : Debt per person is calculated by dividing the debt outstanding by the population of the country, as published by the US Census Bureau
- Debt Held by the Public : This portion of the national debt is held primarily by the American public, followed by foreign governments and U.S. banks and investors
The national debt has increased every year over the past decade, and interest expenses on the debt have remained fairly stable due to low interest rates and the government's low risk of default
. However, recent increases in interest rates and inflation are resulting in an increase in interest expenses
. Addressing the rising debt and its structural factors, such as an aging population and rising healthcare costs, is crucial for the country's financial stability
