Re the Ever-Growing US Debt Problem
(from Nigel)
Generally, the federal debt is an accumulation of budget deficits over time. The federal debt in the most recent month of data, June 2025, was $36.2 trillion. This is 1% higher than in June 2024 and up 31% from 2019, before the COVID-19 pandemic.
* For several years, the nation’s debt has been bigger than its gross domestic product, which was $26 trillion at the end of 2022.
* Debt-to-GDP is a useful metric for analyzing the debt over long time spans, as it puts the debt into relative terms by comparing it against the size of the national economy. Looked at this way, debt as a share of GDP has gone through three main growth phases in recent decades.
* While US government debt is perhaps the most widely held class of security in the world, 21.8% of the public debt, or $6.87 trillion, is owned by another arm of the federal government itself.
* That includes Medicare; specialized trust funds, such as those for highways and bank deposit insurance; civil service and military retirement programs; and Social Security.
* Today, the Federal Reserve System is the single largest holder of US government debt.
* The Federal Reserve bought massive quantities of debt during the COVID-19 pandemic in an effort to keep the US economy afloat despite the incredible damage done to it by the shutdowns.
* At its peak in April 2022, the Fed held more than $6.25 trillion in US government debt, more than double its holdings just before the pandemic hit in March 2020.
* Servicing the debt is one of the federal government’s biggest expenses and one of the greatest problems for the economy. According to the OMB, net interest payments on the debt are about $400 billion this fiscal year. That’s 6.8% of all federal outlays, and $100 billion more than the government expects to spend on veterans’ benefits and services and more than it will spend on elementary and secondary education, disaster relief, agriculture, science and space programs, foreign aid, and natural resources and environmental protection combined.
