The U.S. national debt is the total amount of money that the U.S. federal government owes its creditors. The terms “national debt,” “federal debt” and “public debt” are used interchangeably.
According to the U.S. Debt Clock, which maintains a running sum of the U.S. national debt, the national debt currently totals nearly $34.7 trillion.This equates to an average debt of about $103,000 per U.S. citizen and about $267,000 per U.S. taxpayer.
The U.S. federal debt was about $22 billion in 1923. This climbed to over $33 trillion by 2023.
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Total public debt has risen from about 36% of U.S. GDP in 1970 to nearly 122% as of October 2023.
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General U.S. debt statistics
Over the last 100 years, the U.S. federal debt has increased from about $22.4 billion, or $403 billion when adjusted for inflation, in 1923 to almost $33.2 trillion in 2023, according to the Department of the Treasury.
From 2019 to 2021, government spending increased by approximately 50%, due in part to economic impact payments and other forms of tax relief implemented by the government in the wake of the COVID-19 pandemic. High unemployment during this period meant that the increased spending wasn’t counterbalanced by increased revenue.
Other notable recent events that increased the national debt include the wars in Iraq and Afghanistan and the Great Recession, which contributed to a quadrupling of the national debt from about $5.7 trillion at the beginning of 2001 to about $22.7 trillion at the end of 2019.
Some of the federal government’s largest spending categories are income security, Social Security, health care services, national defense and Medicare.Annual spending exceeds $1.7 trillion for Medicare/Medicaid, $1.4 trillion for Social Security, $880 billion for defense and $800 billion for interest paid on the national debt.
Debt-to-GDP ratio
Public debt rose from about 36% of U.S. GDP in October 1970 to nearly 122% of GDP by October 2023.The debt-to-GDP ratio peaked at 125.9% in October 2020.
U.S. debt projections
The national debt has historically decreased during peacetime and periods of economic prosperity.However, during the most recent decades, the national debt has increased every year, regardless of economic or geopolitical climate.
Over the past 20 years, government spending on health care, Social Security and other public benefits has exceeded revenues.Additionally, demographic trends are exacerbating the problem, as the U.S. population is aging and associated health care costs are rising. This puts more pressure on Social Security and Medicare fund balances.
Interest puts further strain on the national debt. Beginning in 2029, it’s projected that the federal government will pay nearly $1 trillion annually in net interest costs.The U.S. Government Accountability Office predicts that, without changes to spending and taxation policies, the debt will grow more than twice as fast as the economy and reach 200% of GDP by 2050.
FAQ
How much is the national debt?
The U.S. national debt has reached nearly $34.7 trillion as of April 18, 2024.
How can we reduce the national debt?
In order to reduce the national debt, the federal government can reduce spending, increase taxes or both. Donations can also be made to reduce the national debt.
What is the difference between the national debt and the federal budget deficit?
A federal budget deficit occurs when the federal government’s expenditures exceed its revenue. This increases the national debt, which is the total amount of funds that the U.S. federal government owes its creditors. A federal budget deficit or surplus is typically measured annually.
References
- USDebtClock.org. “USDebtClock.” USDebtClock.org. Evaluated April 2, 2024.Link Here
- Federal Reserve Bank of St. Louis. “Federal Debt: Total Public Debt as Percent of Gross Domestic Product.” Federal Reserve Bank of St. Louis. Evaluated April 2, 2024.Link Here
- Fiscal Data. “What is the national debt?” U.S. Department of the Treasury. Evaluated April 5, 2024.Link Here
- U.S. Bureau of Labor Statistics. “Women’s earnings were 83.6 percent of men’s in 2023.” U.S. Bureau of Labor Statistics. Evaluated April 11, 2024.Link Here
- U.S. Government Accountability Office. “America’s Fiscal Future.” U.S. Government Accountability Office. Evaluated April 11, 2024.Link Here
- TreasuryDirect.gov. “Gifts to Reduce the Public Debt.” TreasuryDirect.gov. Evaluated April 18, 2024.Link Here
- Aaron H. “The Ultimate, Definitive Guide to the Budget Deficit.” Brookings Institution. Evaluated April 18, 2024.Link Here
- Bureau of Economic Analysis. “Gross Domestic Product.” U.S. Department of Commerce. Evaluated April 18, 2024.Link Here
- Claessens S, Kose MA. “Recession: When Bad Times Prevail.” International Monetary Fund. Evaluated April 18, 2024.Link Here
