The national debt of the United States is the total amount of money that the U.S. federal government owes to Treasury bondholders. The total U.S. federal debt was approximately $36.56 trillion in March 2025.
*Components of the national debt:*
- *Public debt*: Represents the amount the government owes to bondholders, including individuals, corporations, and foreign financial institutions.
- *Intragovernmental debt*: Represents the amount the government owes to itself, such as the Social Security Trust Fund.
*Reasons for the growth of national debt:*
- *Government spending*: Increased government spending can lead to a growing national debt.
- *Taxes*: Insufficient taxes contribute to the increase in national debt.
- *Economic crises*: Economic crises, such as the COVID-19 pandemic, can lead to an increase in national debt due to rising government spending and reduced revenue.
*Effects of national debt:*
- *Increased interest costs*: Rising national debt can lead to higher interest costs, which may affect government spending and the economy.
- *Impact on credit rating*: Increased national debt can lead to a lower credit rating for the United States, which may increase borrowing costs.
- *Impact on the economy*: Rising national debt can have negative effects on the economy, such as inflation and reduced investment.