This has been in the news lately and even though people talk about it, many have no idea what that is. United States public debt is a measure of the obligations of the United States federal government and is presented by the United States Treasury in two components and one total:
2. Intragovernmental Holdings, representing U.S. Treasury securities held in accounts which are administered by the United States Government, such as the OASI Trust fund administered by the Social Security Administration; and
3. Total Public Debt Outstanding, which is the sum of the above components.
In short, it is the money that is owed mostly to the Federal Reserve and to foreign governments. The debt is a sum of all deficits starting from 1791. Deficit (or Surplus) is how much money the government spends (or keeps, respectively) compared to its income (from taxes). If it doesn't have enough, it "borrows" (see: foreign governments above) or prints (federal reserve).
Below is the table of historical public debt, posted here for record purposes:
| Date | Public Debt | Interest Payment |
|---|---|---|
| 09/30/2010 | $13,561,623,030,891.79 | $413,954,825,362.17 |
| 09/30/2009 | $11,909,829,003,511.75 | $383,071,060,815.42 |
| 09/30/2008 | $10,024,724,896,912.49 | $451,154,049,950.63 |
| 09/30/2007 | $9,007,653,372,262.48 | $429,977,998,108.20 |
| 09/30/2006 | $8,506,973,899,215.23 | $405,872,109,315.83 |
| 09/30/2005 | $7,932,709,661,723.50 | $352,350,252,507.90 |
| 09/30/2004 | $7,379,052,696,330.32 | $321,566,323,971.29 |
| 09/30/2003 | $6,783,231,062,743.62 | $318,148,529,151.51 |
| 09/30/2002 | $6,228,235,965,597.16 | $332,536,958,599.42 |
| 09/28/2001 | $5,807,463,412,200.06 | $359,507,635,242.41 |
| 09/29/2000 | $5,674,178,209,886.86 | $361,997,734,302.36 |
| 09/30/1999 | $5,656,270,901,615.43 | $353,511,471,722.87 |
| 09/30/1998 | $5,526,193,008,897.62 | $363,823,722,920.26 |
| 09/30/1997 | $5,413,146,011,397.34 | $355,795,834,214.66 |
| 09/30/1996 | $5,224,810,939,135.73 | $343,955,076,695.15 |
| 09/29/1995 | $4,973,982,900,709.39 | $332,413,555,030.62 |
| 09/30/1994 | $4,692,749,910,013.32 | $296,277,764,246.26 |
| 09/30/1993 | $4,411,488,883,139.38 | $292,502,219,484.25 |
| 09/30/1992 | $4,064,620,655,521.66 | $292,361,073,070.74 |
| 09/30/1991 | $3,665,303,351,697.03 | $286,021,921,181.04 |
| 09/28/1990 | $3,233,313,451,777.25 | $264,852,544,615.90 |
| 09/29/1989 | $2,857,430,960,187.32 | $240,863,231,535.71 |
| 09/30/1988 | $2,602,337,712,041.16 | $214,145,028,847.73 |
| 09/30/1987 | $2,350,276,890,953.00 | $148,010,000,000.00 |
| 09/30/1986 | $2,125,300,000,000.00 | $221,100,000,000.00 |
| 09/30/1985 | $1,823,100,000,000.00 | $165,740,000,000.00 |
| 09/30/1984 | $1,572,300,000,000.00 | $153,800,000,000.00 |
| 09/30/1983 | $1,377,200,000,000.00 | $114,000,000,000.00 |
| 09/30/1982 | $1,142,000,000,000.00 | $100,000,000,000.00 |
| 09/30/1981 | $997,900,000,000.00 | $90,000,000,000.00 |
| 09/30/1980 | $907,700,000,000.00 | $74,800,000,000.00 |
| 09/30/1979 | $826,500,000,000.00 | $67,600,000,000.00 |
| 09/30/1978 | $771,500,000,000.00 | $42,480,000,000.00 |
| 09/30/1977 | $698,800,000,000.00 | $40,000,000,000.00 |
Why is this a concern?
If you are in the States, over the next 20 years, the Social Security funds must be paid back as the Baby Boomers retire. Since this money has been spent, resources need to be identified to repay the loan. This means higher taxes, since the high U.S. debt rules out further loans from other countries. Unfortunately, it's most likely that these benefits will be curtailed, either to retirees younger than 70, or to those who are high income and therefore don't need Social Security.
Second, many of the foreign holders of U.S. debt are investing more in their own economies. Over time, diminished demand for U.S. Treasuries could increase interest rates, thus slowing the economy. Furthermore, anticipation of this lower demand puts downward pressure on the dollar. That's because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand.
Third, and this one doesn't matter if you are in the States or not, many commodities (eg: gas, oil, real estate in some places) in foreign countries are tied to US dollar. With the U.S. being the global economic leader, if the US dollar declines, it will cause unpredictable financial failures around the world.
