The U.S. national debt the sum of all outstanding debt owed by the Federal Government, and is now more than $16 trillion. Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds. The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to Social Security and other trust funds, which were running surpluses. These securities are a promise to repay these funds when Baby Boomers retire over the next 20 years.
The Size of the U.S. Debt:
The U.S. debt is the largest in the world for a single country. (The EU debt is close, and often greater.) How did it get so large? Purchasers of Treasury bills still reasonably expect the U.S. economy to recover enough to pay them back. For foreign investors like China and Japan, the U.S. is such a large customer it's allowed to run a huge tab so it will keep buying exports.
Even before the economic crisis, the U.S. debt grew 50% between 2000-2007, ballooning from $6-$9 trillion. The $700 billion bailout helped the debt grow to $10.5 trillion by December 2008. The debt is tracked by the national debt clock.
The National Debt Level:
The debt level is the debt as a percent of the total country's production, or GDP, which was $15.9 trillion at the end of 2012. That made the debt-to-GDP ratio greater than 100%, raising alarms for policy-makers. This was double the 51% debt-to-GDP ratio in 1988.
Interest on the debt was $454 billion in Fiscal Year 2011, the highest ever. That's despite the lowest interest rates in 200 years. The interest on the debt in the FY 2103 budget is $248 billion, the sixth largest budget item.
How Did the Federal Debt Get So Large?
Government debt is an accumulation of Federal budget deficits. Therefore, the best way to look at how the debt got so large is to compare the budget deficits by President. The largest...