FAQs
Nearly every year, the government spends more than it collects in taxes and other revenue, resulting in a deficit. (The debt ceiling, set by Congress, caps how much the U.S. can borrow to pay for its remaining bills.) The national debt, now at a historic high, is the buildup of its deficits over time.
How did the US government get into so much debt? ›
One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.
How much has the national debt increased in 2023? ›
30, 2023, the federal debt was $33.2 trillion—up $2.2 trillion from FY 2022—and interest on the debt was $875.5 billion, an increase of $151.9 billion from FY 2022.
Who owns US debt by country 2023? ›
Nearly half of all US foreign-owned debt comes from five countries.
Country/territory | US foreign-owned debt (January 2023) |
---|
Japan | $1,104,400,000,000 |
China | $859,400,000,000 |
United Kingdom | $668,300,000,000 |
Belgium | $331,100,000,000 |
6 more rows
Who owns most of the US debt? ›
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
How much does China owe the US? ›
The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
What is the leading cause of debt in America? ›
The largest percentages of the average consumer debt balance are mortgages.
What is the biggest contributor to the national debt? ›
Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt. Comparing a country's debt to its gross domestic product (GDP) reveals the country's ability to pay down its debt.
Can the US ever pay its debt? ›
Thus, debt is continually paid down and new debt incurred, to be paid down by creation of new debt, ad infinitum. If total indebtedness as a percentage of the national economy does not grow, this can continue forever.
Why is US debt so high? ›
Years of elevated budget deficits, exacerbated by massive federal spending during the COVID-19 pandemic, have taken the debt to historic levels: totaling more than $26 trillion in 2023, U.S. federal government debt is now at its highest percentage of gross domestic product (GDP) since World War II.
Among other countries, Japan and China have continued to be the top owners of US debt during the last two decades. Since the dollar is a strong currency that is accepted globally, holding a substantial amount of US debt can be beneficial.
What country has the most debt in the world 2023? ›
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023. *For the U.S. and Canada, gross debt levels were adjusted to exclude unfunded pension liabilities of government employees' defined-benefit pension plans.
Which 5 countries own the most U.S. debt? ›
- Japan. Japan held $1.15 trillion in Treasury securities as of January 2024, beating out China as the largest foreign holder of U.S. debt. ...
- China. China gets a lot of attention for holding a big chunk of the U.S. government's debt. ...
- The United Kingdom. ...
- Luxembourg. ...
- Canada.
What country is not in debt? ›
Singapore is one of Asia's major financial centers. It is also one of the most prosperous countries on the planet. And all this has been achieved without taking on any meaningful public debt. In fact, very much like Norway, Singapore has more assets than debt.
Does Russia own U.S. debt? ›
Russia owns less than 2.5 $Billion in US Treasury notes, a trifling amount. Russia does not “own” US debt. It just owns bonds that are not callable and it takes its interest payments as agreed. Russia has sold almost 100 $Billion in US bonds to reduce its vulnerability to US sanctions.
How can the US be trillions in debt? ›
Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.
Who holds the $30 trillion US debt? ›
As of December 2023, total federal debt was $33.1 trillion; $26.5 trillion held by the public and $12.1 trillion in intragovernmental debt.
Could the US ever pay off its debt? ›
Reducing the debt will require Congress to make politically difficult decisions to either curb spending, raise taxes, or both. Other experts say the United States can safely afford to continue borrowing at present levels because it pays relatively little interest due to its unique position in the global economy.