Red lines indicate the "debt held by the public" and black lines indicate the total national debt or gross public debt. The difference is the "intragovernmental debt," which includes obligations to government programs such as Social Security. Stated as a formula, National Debt = Debt held by the Public + Intragovernmental Debt. The second panel shows the two debt figures as a percentage of U.S. GDP (dollar value of U.S. economic production for that year). The top panel is deflated so every year is in 2010 dollars.

 

Debt Held by Federal Accounts is money the federal government borrows from itself. It results from the Treasury using surpluses from some accounts – for instance, Social Security – to buy Treasury bonds, and thus finance current government spending. Borrowed funds ultimately need to be repaid to the original account, with interest.Debt held by the public is the total amount the government owes to all of its creditors in the general public. That includes American citizens, banks and financial institutions as well as people in foreign countries, foreign institutions and foreign governments.

 

Debt held by the public is the total amount the government owes to all of its creditors in the general public. That includes American citizens, banks and financial institutions as well as people in foreign countries, foreign institutions and foreign governments.The Federal Reserve buys and sells Treasury bonds as part of its work to control the money supply and set interest rates in the U.S. economy.)

 

While there are many economic variables in play. Complexity fuels confusion and controversy regarding the debt.  High amounts of government debt and deficit spending in the long term dramatically increases the impact of future interest payments. As deficits continue, an increasing amount of the annual budget will be required for interest payments ($221 billion or 6% in 2013, CBO estimate 4x increase in decade).

 

 Partisan politics dominates the discourse in Washington regarding the debt. Attempts by Congress to control the debt have been largely unsuccessful (debt ceiling raises)vIt is not uncommon for governments to hold debt, however in recent years the United States debt has skyrocketed to a seemingly insurmountable, $17.5 trillion and is still increasing. vWhile the US carries a large debt, it must be analyzed relative to the size of the economy – US debt/GDP 77%. Compare against other countries debt/GDP: (Japan 221%, Portugal 153% Greece 148%; Italy 137%, Ireland 130%, Spain 111%).