Does the U.S. National Debt Really Matter?
Picture the government of the U.S. as a family that spends more than it earns. To cover the extra costs it borrows money. All this borrowed money adds up over the years. This is called the national debt. Right now the U.S. owes close to $36 trillion.
How does the government borrow? It sells something called Treasury bonds. These are like IOUs. People companies and even other countries buy them. That means they give money to the U.S. and get interest in return.
This system has worked for a long time because people trusted the U.S. and its dollar. But now interest rates are higher than before. When the U.S. replaces old bonds with new ones it has to pay more interest. That could mean more than a trillion dollars in interest each year.
That’s a huge amount. If the debt keeps growing countries might worry and ask for even higher interest to keep lending.
Even if it feels far away the national debt does affect the daily life of everyone.
