What is Global Debt?
What is National Debt?
Treasury bonds are government-issued debt securities with maturity periods of 20 or 30 years. These T-bonds accumulate interest regularly until maturity, when the investor receives a principal amount equivalent to the face value.
T-bills are a limited-term debt obligation endorsed by a government, with a one-year or briefer maturity.
T-notes are securities that come in maturities of 2, 3, 5, 7, and 10 years, with interest disbursed every six months.
Floating-rate notes are government-issued securities lasting for two years, yielding interest amounts quarterly until maturity. These interest fluctuations are pegged to the discount rates established in 13-week Treasury bill auctions.
Treasury inflation-protected securities are financial instruments whose principal value is modified in response to fluctuations in the Consumer Price Index. These bonds distribute interest payments every six months and are available for 5, 10, and 30 years.
Which Country Has the Biggest National Debt?
What is the Debt-to-GDP Ratio?
Countries
| National Debt (in trillion USD) as at August 2023 | Debt-to-GDP Ratio (in %) as at 2022 |
United States | $32.8 trillion | 121.68% |
China | $15.6 trillion | 77.1% |
Japan | $11.3 trillion | 261.29% |
France | $3.4 trillion | 111.06% |
UK | $3.4 trillion | 102.64% |
Italy | $3.2 trillion | 144.4% |
India | $3.1 trillion | 83.13% |
Germany | $3.0 trillion | 66.54% |
Canada | $2.2 trillion | 105.11% |
Brazil | $1.9 trillion | 85.91% |
Why is the US in so Much Debt?
American Revolutionary War Debt (Late 1700s): During the late 1700s, as a result of the American Revolutionary War, the United States found itself burdened with a debt that had grown to over $75 million by the start of 1791.
Land Sales and Budget Cuts (Early 1800s): In 1835, the debt decreased due to the sale of federally-owned lands and austerity measures implemented in the federal budget.
Economic Depression (Early 1800s): Shortly after the reduction, an economic downturn triggered a resurgence in the national debt.
American Civil War (1860s): The national debt experienced an astonishing increase during the Civil War, soaring over 4,000% from $65 million in 1860 to approximately $2.7 billion by the war’s end in 1865.
Early 20th Century Debt Growth: The US federal debt continued to increase into the 20th century, reaching approximately $22 billion after funding World War I.
Afghanistan and Iraq Wars: Last year, the Defense Department reported direct expenses exceeding $1.6 trillion for the wars in Iraq, Syria, and Afghanistan. However, a study by Brown University researchers, which factored in indirect costs like veterans’ support and the interest on borrowed funds for military funding, revealed a significantly higher total cost—nearly $6 trillion for all of America’s “War on Terror” efforts following September 11.
2008 Great Recession: The 2008 global economic downturn led to a growth in debt levels as the government initiated stimulus programs and interventions to restore economic stability.
COVID-19 Pandemic: From fiscal year 2019 to 2021, the national debt increased by about 50% due to the substantial government spending of $3.4 trillion related to COVID-19 relief. This spending included tax cuts, Joe Biden’s $1.9 trillion stimulus programs, and increased government expenditures, exacerbated by reduced tax revenue from widespread unemployment.
Bipartisan Congressional Support for Ukraine: From the onset of the US’ proxy war in Ukraine, the Biden administration and Congress have earmarked over $75 billion in aid for Ukraine, encompassing humanitarian, financial, and military backing, as corroborated by the Kiel Institute for the Global Economy, a German research center. However, the government often borrows money by issuing Treasury bonds and securities to cover deficits resulting from increased defense spending during conflicts. This borrowing adds to the national debt as the government accrues interest on the borrowed funds.