What is the national debt?

It's the total amount the federal government owes — every dollar it has borrowed and not yet paid back. Here's how it works, without the jargon.

The short answer

When the federal government spends more than it collects in taxes and other revenue, it borrows the difference. It does that by selling Treasury securities — IOUs that promise to pay the buyer back, with interest. The national debt is the total of all those IOUs that haven't been repaid yet.

As of the Treasury's latest official count (this week), that total is above $40 trillion. It passed $40 trillion on August 18, 2026, and it grows by roughly $6.7 billion a day.

Debt vs. deficit: not the same thing

These two words get mixed up constantly, but the difference is simple:

• The deficit is how much the government comes up short in a single year. In fiscal year 2026 (October 2025 – September 2026), the deficit was about $1.99 trillion, up from about $1.78 trillion the year before.
• The debt is the running total: every past deficit, minus the few years of surplus, plus some other borrowing (more on that below).

Think of the deficit as this month's credit-card overspending, and the debt as the card's total balance. The last time the U.S. ran a surplus — took in more than it spent — was fiscal year 2001.

How the government borrows

The Treasury Department sells several kinds of securities at regular auctions, from a few weeks long to 30 years:

• Treasury bills — short-term, maturing in a year or less.
• Treasury notes — 2 to 10 years.
• Treasury bonds — 20 and 30 years.
• TIPS — bonds whose value rises with inflation.
• Savings bonds — the kind people buy for themselves or give as gifts.

Buyers include American banks, pension funds, mutual funds, individuals, foreign governments and the Federal Reserve. When a security comes due, the Treasury usually pays it off by selling a new one — which is why the total keeps rolling forward instead of shrinking. The average interest rate on all of it is currently about 3.5%.

Two kinds of debt

The headline number combines two very different pieces:

Economists usually focus on debt held by the public, because that's money the government has to raise in the markets. The intragovernmental part matters too: it represents money the government has promised to future retirees, and it has to be paid back when those programs draw on their trust funds. Read more in Who owns U.S. debt?

Why it keeps growing

Debt grows whenever spending outpaces revenue. In recent decades, the main drivers have been:

• An aging population. Social Security and Medicare costs rise as more Americans retire.
• Health-care costs, which have grown faster than the economy for decades.
• Interest on the debt itself — now over a trillion dollars a year (see the numbers).
• Tax policy — tax cuts lower revenue unless they're offset elsewhere.
• Emergencies — wars, recessions and the COVID-19 pandemic, when the government borrowed heavily to respond. The debt jumped by more than $4 trillion in 2020 alone.

Economists across the spectrum agree on the arithmetic; they disagree on which of these to change. That's a political choice, and this site takes no side on it.

Does the debt matter?

There are real arguments on both sides:

• Reasons for concern: interest costs crowd out other spending; heavy borrowing can push up interest rates for everyone; and less room to borrow means less ability to respond to the next crisis. All three major credit-rating agencies have lowered the U.S. from their top rating — S&P in 2011, Fitch in 2023 and Moody's in 2025.
• Reasons for less alarm: the U.S. borrows in its own currency, Treasury securities are still the world's most-demanded safe asset, and the economy has grown alongside the debt for most of its history.

What nearly everyone agrees on: the debt has been growing faster than the economy, and that can't continue forever.