National Debt Definition

The national debt is the sum of all deficits minus the sum of all surpluses from this and previous years. The more we borrow each year, the more our debt rises.

Example of a National Debt Calculation

If, hypothetically, a country is running a deficit in year 1 of $250 billion, in year 2 of $300 billion, in year 3 of $200 billion, and in year 4, a surplus of $100 billion, then (assuming no other deficits or surpluses) the country’s total national debt is

$250 + $300 + $200 -$100 = $650 billion

United States National Debt Data

In the United States, at the beginning of the Reagan administration in 1980, the national debt was “only” $930 billion (see table below). It then grew to $2,600 billion by the end of his administration in 1988, an almost three-fold increase. It has continued to increase thereafter at a rapid pace during most years. Currently, in the United States, the increasing burden of the Social Security program, rising costs of health and medical programs, defense-related spending, and ¬†rising interest payments on the national debt are putting a strain on the government’s purse. During this year, 2017, the United States national debt will be in excess of $20 trillion. For an up-to-the-minute account of our national debt, please click here: US National Debt Clock.

For a table with United States National Debt figures for selected years since 1945, see below. This table also includes the debt as a percentage of the size of our economy (as measured by nominal GDP). The percentage has fluctuated from a World War II (1945) high of 116% to a post-World War II low of 33% (1980).

Year Total National Debt  (held by the public and government agencies (mostly the Federal Reserve); rounded to the nearest billion dollar РDecember 31). Nominal GDP
(rounded to the nearest billion dollar)
National Debt as a Percentage of Nominal GDP (rounded to the nearest whole number)
1945 259 223 116
1950 257 294 87
1960 290 526 55
1970 389 1,039 37
1980 930 2,790 33
1985 1,946 4,220 46
1990 3,233 5,803 56
1995 4,974 7,398 67
2000 5,674 9,817 58
2001 5,807 10,128 57
2002 6,288 10,470 60
2003 6,783 10,961 62
2004 7,379 11,713 63
2005 7,933 12,455 63
2006 8,420 13,377 64
2007 9,008 14,029 64
2008 9,353 14,292 66
2009 12,816 13,974 92
2010 14,025 14,499 97
2011 15,053 15,076 100
2012 16,353 15,536 105
2013 17,440 16,768 104
2014 18,898 17,272 109
2015 19,336 18,036 107
2016 19,950 18,800 106

National Debt Source: U.S. Treasury Department.
Nominal GDP Source: Bureau of Economic Analysis.

Interest on the Debt

When a country borrows money from its citizens and from foreign investors, it pays interest each year to them. The interest is similar to a finance charge you pay on a credit card balance if you don’t pay it off at the end of the month. Below is a table with United States federal government total interest expenses in selected years (this figure does not include interest the federal government receives on its own investments). In some years, the total debt increases, while the total interest expense decreases, and vice versa. This is due to interest rate fluctuations. During years when market interest rates are lower, the government can finance its debt at more favorable conditions. Recently, interest rates have been relatively low in the United States and other industrialized countries. This has allowed these governments to borrow at low rates and has allowed them to pay less interest than would have been the case at higher rates. With rising national debts, and likely higher interest rates in the future, the total interest expense is expected to rise considerably in future years.

Year Total United States Interest Expense (on Treasury debt securities; rounded to the nearest billion dollar, as per fiscal year end)
1990 265
1995 332
2000 361
2001 359
2002 332
2003 318
2004 321
2005 352
2006 406
2007 430
2008 451
2009 383
2010 414
2011 454
2012 360
2013 416
2014 431
2015 402
2016 447

Source: U.S. Treasury Department (http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm).