National debt
The accumulated total the federal government owes from every past deficit — a stock whose interest is paid by taxpayers or inflation.
Two figures circulate and they are not the same. Debt held by the public is what the government owes to outside holders — individuals, funds, foreign governments, and the Federal Reserve. Gross federal debt adds intragovernmental holdings, chiefly the balances credited to trust funds such as Social Security.
For questions about the government’s borrowing in financial markets, debt held by the public is the relevant number. For questions about the statutory debt limit, the gross figure is the one that binds.
Interest on the stock is itself an outlay. It does not require a new program. It is the bill for every prior deficit that was not closed with a surplus. Bondholders are paid in dollars. Taxpayers, later, provide those dollars — or, if the real burden is reduced by a higher price level, households on fixed incomes provide them through inflation. See debt vs. deficit.
A worked example
Suppose total public debt outstanding is $40 trillion. Of that, a slice is held by federal trust funds — chiefly Social Security’s — as a bookkeeping entry of what the government owes itself. The remainder is held by the public: households, funds, banks, foreign governments and the Federal Reserve. Which figure matters depends on the question. Whether Treasury is near the statutory limit: the gross total. How much the government has borrowed in markets: debt held by the public.
The figures are illustrative round numbers. The real total, stamped, is on the debt page and the debt clock.
How to read it in coverage
A debt figure without a label is usually the gross total, because it is the larger and the one Treasury publishes daily. Debt “as a share of GDP” is the comparison economists use, because a number in trillions means little without the size of the economy beside it. The debt rises in any year with a deficit — so “the debt hit a record” is true in nearly every year and is not, by itself, news. “We owe it to ourselves” is true only of the intragovernmental slice.
Usually quoted as total public debt outstanding. It is worth checking whether a figure means debt held by the public or the gross total, which includes what the government owes itself.