From Wikipedia, the free encyclopedia - View original article
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budget and debt topics
The United States public debt is the amount owed by the federal government of the United States. The measure of the public debt is
From Wikipedia, the free encyclopedia - View original article
|Part of a series on Government|
budget and debt topics
The United States public debt is the amount owed by the federal government of the United States. The measure of the public debt is the value of the Treasury securities that have been issued by the Treasury and other federal government agencies[which?] and which are outstanding at that point of time. Gross public debt consists of two components:
In general, debt held by the public increases as a result of government spending and decreases as a result of government tax or other receipts, which fluctuate in the course of the fiscal year, and in practice Treasury securities are not issued or redeemed on a day-by-day basis. (Treasury securities may also be issued or redeemed as part of government macroeconomic management.) The government surpluses between FY1998-FY2001 decreased the debt in the hands of the public, but was offset by increases in intragovernmental debt. The aggregate, gross amount that Treasury can borrow is limited by the United States debt ceiling.
Historically, the US public debt as a share of GDP increased during wars and recessions, and subsequently declined. For example, debt held by the public as a share of GDP peaked just after World War II (113% of GDP in 1945), but then fell over the following 30 years. In recent decades, however, large budget deficits and the resulting increases in debt have led to concern about the long-term sustainability of the federal government's fiscal policies. The ratio of debt to GDP may decrease as a result of a government surplus as well as due to growth of GDP and inflation.
On October 24, 2013, debt held by the public was approximately $12.122 trillion or about 72.8% of Q2 2013 GDP. Intragovernmental holdings stood at $4.9 trillion (29%), giving a combined total public debt of $17.078 trillion. As of January 2013, $5 trillion or approximately 47% of the debt held by the public was owned by foreign investors, the largest of which were the People's Republic of China and Japan at just over $1.1 trillion each.
Except for about a year during 1835–1836, the United States has continuously held a public debt since the US Constitution legally went into effect on March 4, 1789. Public debt as a percentage of GDP reached its highest level during Harry Truman's first presidential term, during and after World War II, but fell rapidly in the post-World War II period, and reached a low in 1973 under President Richard Nixon. Debt as a percentage of GDP has consistently increased since then, except during the presidencies of Jimmy Carter and Bill Clinton.
On June 28, 2013, debt held by the public was approximately $11.901 trillion or about 71.43% of GDP. Intragovernmental holdings stood at $4.837 trillion, giving a combined total public debt of $16.738 trillion.
The national debt can also be classified into marketable or non-marketable securities. As of March 2012, total marketable securities were $10.34 trillion while the non-marketable securities were $5.24 trillion. Most of the marketable securities are Treasury notes, bills, and bonds held by investors and governments globally. The non-marketable securities are mainly the "government account series" owed to certain government trust funds such as the Social Security Trust Fund, which represented $2.7 trillion in 2011. The non-marketable securities represent amounts owed to program beneficiaries. For example, in the case of the Social Security Trust Fund, the payroll taxes dedicated to Social Security were credited to the Trust Fund upon receipt, but spent for other purposes. If the government continues to run deficits in other parts of the budget, the government will have to issue debt held by the public to fund the Social Security Trust Fund, in effect exchanging one type of debt for the other. Other large intragovernmental holders include the Federal Housing Administration, the Federal Savings and Loan Corporation's Resolution Fund and the Federal Hospital Insurance Trust Fund (Medicare).
Only debt held by the public is reported as a liability on the consolidated financial statements of the United States government. Debt hel