The U.S. government incurs debt when it issues Treasury securities to fund the deficit between the amount of money that it receives in taxes and other revenues versus the amount of money that it spends on defense, welfare programs, the interest it pays on its current debt, and more. As of Oct. 8, 2022, the government's total debt was $31.1 trillion.
KEY TAKEAWAYS
The Bureau of the Fiscal Service classifies national debt in two ways: intragovernmental debt and debt held by the public.
- Over three-quarters of the total national debt is public debt, which includes Treasury holdings by foreign countries.
- Japan is the largest foreign holder of public U.S. government debt, owning $1.3 trillion in debt as of May 2022.