While the United States may have one of the largest economies in the world, the country has its fair share of problems. In fact, one of the major challenges facing the U.S. today is the overwhelming amount of national debt. The countrys national debt is made up of direct liabilities or money which is owed by the government. There are different categories which are used to refer to the national debt, including public debt, debt held by the public and gross federal debt. These include public debt securities issued by the Treasury Department, such as bills, notes and different types of bonds. Americas national debt has also accumulated as a result of money borrowed from both internal and external sources. Money which the government owes to lenders within the country refers to internal debt, while money owed to foreign lenders refers to external debt. Because the U.S. government represents the people, taxpayers are also held responsible for the countrys national debt dilemma to a certain degree. Therefore, a portion of the tax money paid by citizens each year goes directly towards paying off the national debt, which is mostly used to cover the interest. Over the last few years alone, the U.S.s national debt amount has grown significantly and is now over $9 billion.When it comes to understanding the history of national debt, its important to be aware of how governments borrow money in order to keep their countries running. One of the ways in which they obtain the necessary funds is by issuing securities, which includes government bonds and bills. Similar to the rules and regulations that govern traditional lending for individuals, countries who possess good credit can easily secure money from financial lending institutions. This is true within their countries, as well as outside or foreign sources. The credit worthiness is based upon the countrys ability to pay back what is borrowed, the economic status, and other forms of revenues. Countries with a lower credit rating are usually limited when it comes to the amount of money they can borrow. Additionally, they are also subject to adhere to more stringent laws.Americas history of national debt can be greatly attributed to the countrys borrowing and spending habits. Over the years, many countries, including China have loaned the U.S. billions of dollars to cover various expenses. However, just like credit card debt, the interest continues to accumulate as the amount being borrowed increases. Consequently, the U.S. owes a significant amount of money in interest alone to other countries which have been used as lending resources, as part of the entire national debt.With the country suffering financially and ongoing discussions about the economy heading towards a recession, one has to question, what is the cause for the national debt? There are actually many contributing factors, as well as several probable causes which have reinforced the U.S.s national debt situation. Many believe that the fault lies in overspending which administrations and congresses have indulged in with a variety projects, programs, and defense expenditures. America also spends billions of dollars for a range of public uses, which all contribute to the national debt. These include the following:
Department of Agriculture Department of Defense Department of Education Department of Vets Affairs Health and Human Services Social Security Administration Treasury Department
Although the United States national debt problem is currently at an all time high, there is still hope for debt reduction. However, in order for this happen, the country needs to change its spending practices. With new presidential representation just around the corner, perhaps Americans can begin to hope for a better economy in the upcoming years.