The United States National Debt

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How large is the United States national debt currently?

The current United States’ “national debt is the sum of the arrears held by the US government, and it stands at $328 billion, which has shattered the record of $238 billion set in the past two years” (Chessman 101). The amount of the public debt is worth “the treasury securities, which have been released by the treasury together with other government agencies and which are improbable at such a moment” (Chessman 105). The gross public debt has two elements in its making.

The significant gross public debt “is the debt held by the public, which comprises the Treasury securities owned by investors who are not in the federal government, and it includes debt held by corporations, individuals, foreigners, and local governments” (Chessman 108).

Secondly, the intra-governmental debt, “such as non-marketable treasury securities, is owned in the accounts controlled by the government belonging to the program, while debt held by government accounts designates the collective remainders comprising interest earnings that have been bankrolled in the treasury securities” (Chessman 110).

Conventionally, debt owned by the public escalates as an outcome of government usage, while government taxation leads to the decrease in the public debt. The public debt goes up and down depending on the Treasury securities issued. The debt can also be cut down by decreasing the debt to GDP ratio.

This goal can be achieved via growing the GDP reasonably faster than the increase in the debt. When the treasury goes for high-interest borrowing, inflation rate goes higher than the rate paid on the debt (Chessman 82). This scenario causes an increase in the debt. The government has to go for low-interest rates, which redeems taxpayers’ money.

What percentage of the Gross Domestic Product (GDP) is the debt?

The ratio of Gross Domestic Product may go down as an outcome of the government having remainders caused by the increase in gross domestic product and inflation. The U.S debt went higher to surpass 100 percent of gross domestic product to stand at 102%, which followed the House of Representatives’ move that realized the lifting of the debt ceiling.

Which countries hold the greatest proportion of the United States’ national debt?

The highest proportion of the United States’ national debt is held by China. Eight percent of the United States public debt is by China. China holds approximately $1.2 trillion, “which is bigger than the sum held by the American households” (Chinn and Frieden 88). The second largest debt is owned by Japan. Japan owns an estimated value of $912 billion.

The other countries “in the U.S national debt include the United Kingdom, which owns up to $347 billion and Brazil, which holds a proportion of the debt of $211 billion” (Chinn and Frieden 92). Taiwan comes in at the fifth position holding up to $153. The other countries in Europe are Albania, Armenia, Croatia, Belgium, and the Czech Republic.

Does it matter that the debt is now going to grow even larger now because of the United States House of Representatives has increased the debt ceiling? Why or why not?

Considering that the interest rates on the debt now is up to $300 billion, or a bit higher by 6 percent of the whole budget, it matters that the debt is going to grow even larger following the House of Representatives moves to increase the debt ceiling. There exists an entitlement expenditure of $2.2 trillion, which approximated to 62 percent, and by combining the two, it is clear that more than two-thirds of the national budget cannot be controlled (Chinn and Frieden 86).

Recent research showed that half of all Americans were not proposing or did not agree with the raising of the Debt Ceiling by the House of the Representatives. One-quarter of the Americans wanted the debt ceiling to be raised. The research also highlights that the rest of the Americans amounting to 24% were not sure which way to go – to oppose or propose the raising of the ceiling debt.

Most Americans believe that this move will affect the most important budget items, including the reduction of money allocated to Social Security, health care services, and the Education sector. Raising the debt ceiling will affect not only Americans but also the entire world. Given that the Americans are not ready to cut on their essential services mentioned earlier, they feel that the government should reduce the amount of money being spent overseas.

The United States Federal government has bee instrumental in ensuring peace across the world by making sure that people around the world enjoy democracy and freedom.

Considering its recent activities in Iraq, Afghanistan, and Libya, the US spends heavily on military intervention overseas and with the debt ceiling in place; the Obama administration may allocate more resources towards the fight against terrorism. In a bid to execute counter-terrorism initiatives, the United States will have to spend heftily, which is well catered for by the increase debt ceiling. Unfortunately, the country will continue sinking deeper into debt, which transfers the burden to the next generation.

Works Cited

Chessman, Tyler. Understanding the United States Debt, Seattle: Createspace Independent Publishing, 2011. Print.

Chinn, Menzie, and Jeffry Frieden. Lost Decades: The Making of America’s Debt Crisis and the Long Recovery, New York: W. W. Norton & Company, 2011. Print.

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The United States National Debt

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