The U.S. national debt refers to the total amounts owed by the U.S. federal government to creditors. It is the accumulation of annual budget deficits, where government spending exceeds revenue.
🔢 Key Facts (as of mid-2025):
Total National Debt: Over $34 trillion
Divided into:
Public Debt (approximately $27 trillion): Borrowed from individuals, companies, and foreign governments.
Internal Government Investments (approximately $7 trillion): Borrowed from government programs such as Social Security.
📈 Its Importance:
Interest Payments: An increasing portion of the federal budget is allocated to paying interest on the debt.
Economic Impact:
Rising debt can affect inflation, interest rates, and economic growth.
Credit Ratings: A high level of debt could lead to a downgrade in the U.S. credit rating, increasing borrowing costs.
📉 Reasons for Rising Debt:
Tax Cuts (such as the Tax Cuts and Jobs Act of 2017)
Military Spending
Healthcare and Social Security Costs
COVID-19 Relief Packages
Interest on Existing Debt
🧠 Did You Know?
The United States has never defaulted on its debt.
The debt-to-GDP ratio is an important measure; by 2025, it will approach 125% - a historically high level.