What is the 'National Debt' and Why Does It Matter

We are, let’s face it, a nation of debtors. As of December 2017, we citizens have a collective household debt of $13.15 trillion when you add up our national IOUs on mortgages, student loans, credit cards, and car loans. And that figure mounts with every passing quarter. Granted, we’re no deadbeats—less than 5 percent of our overall debt is in delinquent status. Still, we are by and large pretty comfortable with being in the red. And, unfortunately, so is our government...and quite possibly to far worse effect.

The US government now owes much more than its citizens do collectively, with the government racking up the bill on health care, Social Security, the military, and the accumulated interest. Right now, our national debt is higher than the market value of everything we make and do in this country each year—our gross domestic product, or GDP. And while we would all grouse that our taxes are too damn high, the $3 trillion the IRS collects from us and our corporations, along with duties collected on incoming products, doesn’t come anywhere near covering what the government spends. That’s been pretty much the norm for a long time.