Paul Solman:
To cover the gap between what the government spends and what it collects, we sell IOUs, call them bonds. About a fifth of our debt is held by different parts of the government itself, while the rest is held by the public, which includes foreign governments, investors and folks like you and me.
We rely on this debt to help fund the government. In 2024, that included about $4 trillion on benefit programs like Social Security, Medicare and Medicaid, and nearly $2 trillion defense and basically everything else. In all, the U.S. spent $1.8 trillion more than it took in, contributing to a national debt that we have been building on and off since the country’s founding.
