What it is
This debt is primarily financed through the issuance of government securities such as Treasury bills, notes, and bonds, sold to domestic and international investors. It represents the sum of all past annual budget deficits and surpluses. The national debt is a liability of the government, reflecting its financial obligations.
A growing national debt can raise concerns about a government's ability to service its obligations, potentially leading to higher interest rates for future borrowing or a credit rating downgrade. High debt levels can also put pressure on public finances, limiting a government's fiscal flexibility during economic downturns or crises.
Why it matters
The size and trajectory of the national debt can impact long-term interest rates, government spending, and the country's economic stability.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice