National Debt

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U.S. National Debt

In 2012, reelection polls show that the biggest concern expressed by the voters was the economy and national debt. Many economists, political leaders, and citizens are under the impression that America’s rising debt and purchasing of national debt bonds by the foreign countries will lead America to its inevitable bankruptcy. Some speculators predict that one day China will realize that the dollar is no longer valuable to hold because of its devaluation; therefore, Chinese will no longer purchase our national debt bonds which will lead to the collapse of American financial markets. Others think that the precious metals and commodities will drastically increase in value leaving the dollar worthless and resulting revolts in America. The U.S. Nation Debt is explained and quantified by its significance in terms of debt-to-gross domestic product ratio.

The national debt is more controversial today than the future of America. Political leaders along with the economists continue to spread negative propaganda regarding the state of economy to benefit financially or for the sake of political motives. However, there seems to be various pessimistic views on the economy and yet there is no one interested in addressing and providing an optimistic solution; therefore, it is important to understand the ownership aspect of America’s national debt. In principle, any entity who has bought United States Treasury bills, Notes, or Bonds has lent money to the U.S. government hence they hold the U.S. national debt. It is crucial to understand that the segregation and differentiation between the types of debt holders. The first type is the “public debt” which is held by financial institutions, foreign governments, and individuals. The second type is the “U.S. Debt” which is held by the government and its intergovernmental departments such as Federal Reserve Bank, Social Security Trust Fund, and Pension Funds etc. Beside the ownership types of public and...
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