Government Debt

Governments have expenses through a fiscal year to maintain its operations. They include defense related, social security, healthcare, public services like post, museum, libraries, public transport, ports etc. Governments generate revenue from activities like public and corporate taxes. When the expenses is higher than the revenues, the budget is in a deficit. US Debt is considered as one of the safest form of debt worldwide and is held by many economies globally. Countries across the world can own a piece of this debt by buying treasury bills. Every year the government is entitled to pay interest for the outstanding debt. Thus making it affordable for the government to continue expanding the country’s economy. Government debt is usually considered as a safe instrument since the national reserve can always print more money to pay the debt. But in the process also devalue the currency and leading to more inflation.

Here is a cool infographic about the US Debt.

Brief History of US Debt – An infographic by the team at Fisher Investments

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