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 about $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 its internal accounts, such as the Social Security Trust Fund.
*Reasons for the growth of the national debt:*
- *Government spending*: Increasing government spending can lead to a rise in the 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 increased government spending and reduced revenues.
*Effects of the national debt:*
- *Increased interest costs*: Rising national debt can lead to increased interest costs, which may affect government spending and the economy.
- *Impact on credit rating*: Rising national debt can lead to a downgrade of the United States' credit rating, 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.