In August 2025, the federal government’s outstanding public debt passed $37 trillion for the first time in history. But what does public debt mean? And have you ever seen different numbers for how high the national debt is? That is because there are actually three different widely used measurements for the national debt. No matter which measurement you look at, the number is dangerously high, but there are important differences to understand.
Let’s break down each measurement used to calculate the national debt:
The U.S. Treasury borrows money from outside lenders via financial markets to support government activities. This debt is known as the debt held by the public. Debt held by the public is often regarded by economists as the most meaningful measure of debt because it focuses on cash raised in financial markets to support government activities.
The debt is held by individuals, businesses, pension and mutual funds, state and local governments, and foreign entities. This category does not include intragovernmental debt, which is used to track the cash flows of trust funds and other government accounts. Domestic creditors hold approximately 75 percent of the outstanding debt held by the public. The remaining 25 percent is held by foreign creditors.
Source: Peter G. Peterson Foundation
Debt held by the public is often expressed as a percentage of gross domestic product (GDP), which measures the capacity of the economy to support such borrowing. This is particularly useful in comparing debt levels over time and among countries of different sizes.
The United States’ debt to GDP ratio at the end of 2024 was 123 percent. US debt exceeded GDP in 2013 for the first time since 1945, at the end of World War II, and has continued to climb upwards ever since.
In dollar terms, debt held by the public at the end of fiscal year 2024 was $28.2 trillion. The debt is issued in a range of maturities from 1-month bills to 30-year bonds. It also includes securities that are not traded in secondary markets, such as savings bonds and state and local government securities.
Gross national debt is debt held by the public plus debt held by federal trust funds and other government accounts. Another way to think of gross national debt is debt that the government owes to others plus debt that it owes to itself.
At the end of fiscal year 2024 the gross national debt stood at $35.2 trillion. Here is the breakdown of the gross national debt:
Debt subject to limit is very similar to gross federal debt. The main difference between the two measurements is that debt subject to limit excludes debt issued by agencies other than the Treasury, as well as debt issued by the Federal Financing Bank.
Debt subject to limit was reinstated at $36.1 trillion on January 2, 2025. However, as of August 2025, the total national debt has surpassed $37 trillion, which is more than the reinstated limit.
It’s important to understand different measures of debt because they all provide useful insight into our nation’s fiscal condition. Regardless of the measurement, our debt is historically high and this unsustainable trajectory threatens economic opportunities for the next generation.
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