#USNationalDebt

What is the US National Debt?

US National Debt = The total amount of money that the US Government borrows to cover budget deficits → meaning spending more than revenue → thus needing to borrow more.

📌 Divided into 2 main parts:

1️⃣ Public Debt → About 75-80% → Borrowed from:

• Investors, banks, financial institutions

• Foreign countries (e.g., China, Japan, etc.)

• American citizens (buying government bonds)

2️⃣ Intragovernmental Holdings → About 20-25% → The government “owes itself,” for example:

• Social Security Trust Funds

• Medicare Fund

—

📊 Current figures (2025):

• Total US national debt: ~35.5 trillion USD (estimated) → This figure continuously increases every year.

• US debt/GDP ratio: ~122-125% → Meaning debt exceeds GDP → a dangerous level, but the US can still “handle it” because the USD is the international reserve currency.

—

❗ Why does the US have so much debt and hasn’t collapsed?

1. USD is the main currency in global trade → Countries still buy US bonds → The US can “print more money” easier than other countries.

2. The US has the largest economy in the world → high credibility.

3. Rising interest rates → making debt repayment more difficult → risk of technical default if Congress does not raise the debt ceiling.