By Raymond Gao
The current U.S. national debt is about 29 trillion dollars, which is about 125% of the U.S. GDP.
The debt is the highest in the world in plain numbers, and still relatively high when adjusted for the size of the U.S. economy. It is about $80,000 per person.
The debt is owed to a mix of people and organizations. A significant portion of the debt is held by other countries. China and Japan hold the largest portions of this part of the debt. The rest of the public debt is held by various individuals, banks, investors, and others in the U.S. In face value, the debt is currently the highest it’s ever been and going higher. In terms of proportion of GDP, the debt is only comparable to what it was during World War II. The U.S. national government has almost continuously been in some amount of debt since its founding. Recent spending on aid during the COVID-19 pandemic has caused one of the largest single spikes in the increase of this debt, which has overall grown at a high rate in recent decades, both in face value and as a debt to GDP ratio.
Currently, the federal government spends more money than it raises. The government has spent more money than it earns for some time. Should the debt grow too large, the federal government will have a harder and harder time borrowing more money, and be forced to raise taxes or scale back programs that require high spending. Currently, throughout the last few decades, government taxes decreased more times than they have increased, and government spending has slowly ticked up. Interest payments the federal government makes are a significant item on the national budget. Although the U.S. government regularly sets a certain amount of money it can be in debt, known as a “debt ceiling”, when the ceiling is reached, it has so far always been raised to be worried about it later.