Understanding the United States' growing national debt is simple. When the federal government's expenditures surpass what it takes in, it borrows money to cover the annual deficit.
At a staggering $36 trillion as of January 2025, the US national debt continues to grow exponentially, equalling a debt of $106,150 for every single person in the United States. Therefore, understanding the national debt is now more important than ever, especially for young Americans. It affects our economy, job market, and future opportunities in ways we might not immediately recognize.
In this blog, we'll break down what the national debt is, how it works, and why it should matter to you. We'll also explore practical steps you can take to stay informed and impact the national conversation.
The U.S. national debt is the total sum of money the federal government owes to its creditors. This debt accumulates over time when government spending exceeds revenue from taxes and other sources. The government borrows money by issuing Treasury bonds, notes, and bills—financial instruments that investors purchase with the promise of repayment with interest. In summary, it results from the federal government spending more than it takes.
As of January 2025, the U.S. national debt stands at approximately $33 trillion. This staggering figure is divided into two main categories: public and intragovernmental debt. Public debt refers to the money owed to external investors, including individuals, corporations, and foreign governments. Intragovernmental debt describes the funds borrowed from government accounts like Social Security and Medicare. Understanding these categories will help citizens better understand how the national debt influences our economy and daily lives.
The government borrows money primarily to fund essential programs and services, such as infrastructure projects (roads, bridges, public transit, etc.), healthcare programs, defense and military operations, education, research initiatives, and more.
While borrowing helps address immediate needs, it comes with long-term consequences. Interest payments on the debt, which are currently a significant portion of the federal budget, reduce the funds available for other priorities.
A budget deficit occurs when the government spends more than it collects in any given year. The national debt is the cumulative total of these deficits over time. This distinction highlights why managing deficits is critical to controlling the overall debt.
National debt relief refers to strategies aimed at reducing or managing the national debt to avoid long-term economic consequences. Key approaches include reducing government spending, raising taxes, and increasing economic growth. For example, while not ideal, increasing tax revenues would help the federal government cover expenses and bring down the debt.
To learn more about national debt relief, explore resources like the Congressional Budget Office or the Committee for a Responsible Federal Budget.
High national debt levels can create economic uncertainty, making businesses hesitant to invest in growth. This hesitation may slow job opportunities and limit wage increases, directly affecting young workers entering the job market.
Future generations, including today's young Americans, may face higher taxes to address the growing debt burden. These taxes could reduce disposable income and limit opportunities for personal and professional advancement.
Programs like Social Security and Medicare are already under financial strain, decreasing service provision and lowering the quality of care for millions of Americans. Rising debt levels could force difficult decisions about benefit reductions or eligibility changes, therefore impacting the citizens who rely on these services.
Knowledge is power, so staying informed about the national debt is a vital first step. Here are three practical ways to do so:
1. Read from reliable sources. Follow reliable news sources to stay updated on government policies and economic trends through reputable outlets like Treasury Direct (https://www.treasurydirect.gov).
2. Read Government Reports. You can find in-depth analysis and recommendations at the Committee for a Responsible Federal Budget, for example.
3. Understand Budget Plans. Become acquainted with annual budgets and Congressional reports to see how spending decisions affect the growing debt.
Consistently engaging with these resources can help young Americans gain a clearer understanding of the challenges and potential solutions to the problem at hand.
As a young American, you can contribute by taking actionable steps.
Every single voice matters. Engage in civic activities, register to vote, and participate in elections to influence policies that prioritize fiscal responsibility. Attending town halls and engaging with elected officials to advocate for more sustainable economic practices are good ways to start. For young Americans, there are dynamic opportunities, such as competitions, to engage in the national conversation.
Understanding personal finance can help you see the bigger picture. Learning about budgeting, saving, and managing debt to better grasp the concepts behind national debt management are all actionable steps to develop financial literacy.
Lastly, you can support policies that address long-term debt challenges, such as responsible spending cuts, tax reforms, and investments in education and infrastructure. Encouraging your peers to do the same amplifies your impact on the matter.
The US national debt is a complex issue with significant underlying implications for the economy and future generations. By understanding its causes and consequences, young Americans can take informed actions to shape a sustainable future. Staying informed, engaging in civic activities, and advocating for responsible policies are crucial steps toward addressing this pressing challenge. Every action counts and, together, we can work toward a more balanced and prosperous future for every American citizen.