The United States national debt is the total debt owed by the federal government. It is incurred when the government’s expenses exceed its revenues. Thus it has to borrow to cover the deficit. As at March 2019, it stood at $22 trillion and continues to grow steadily every day. Two-thirds of the national debt is borrowed from individuals, companies and institutions. It takes the form of treasury bills, notes and bonds; while a third of the debt is borrowed from other governments. The United States has the largest debt in the world, it is equal to the total national debt of the European Union which comprises twenty-eight member states.

The debt began to grow exponentially from 1989. In 1988, it was only half of the US Gross Domestic Product (GDP). However, from 1989 to 2019 it has grown by approximately 650%. A government’s ability to pay its national debt is calculated as the ratio between the GDP and the debt. A debt-to-GDP ratio of over 77 per cent is a sign of potential financial distress. The US ratio has been above 100 percent since 2013.

national debt
Mid adult manager writing progress charts on a whiteboard during a business presentation with his colleagues in the office. The view is through glass.

Need assignment help? Get custom papers!!

Order Now