National Debt
The total amount of money a national government owes to creditors, accumulated from past budget deficits.
What is National Debt?
National debt (also called public debt or government debt) is the total accumulated amount owed by a central government to all its creditors — domestic and foreign — arising from years of running budget deficits. It includes debt held by the public (Treasury bonds and bills sold to investors) and intragovernmental debt (money owed to government trust funds like Social Security). Economists typically measure national debt as a percentage of GDP to assess sustainability. A key distinction exists between gross national debt and net national debt (which subtracts government-held financial assets). Very high debt-to-GDP ratios can raise borrowing costs and limit policy flexibility, but the safe threshold varies significantly by country and currency regime.
Example
US national debt surpassed $34 trillion in January 2024, exceeding 120% of GDP. Japan's national debt exceeds 250% of GDP, the highest among advanced economies, yet it finances itself largely through domestic bond buyers and maintains very low interest rates through Bank of Japan policy.
Source: US Treasury — Debt to the Penny