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Total indebtedness of a government, especially as evidenced by securities issued to investors. The national debt grows whenever the government operates a budget deficitthat is, when government spending exceeds government revenues in a year. To finance its debt, the government can issue securities such as bonds or treasury bills. The level of national debt varies from country to country, from less than 10% of the gross domestic product (GDP) to more than double it. Public borrowing is thought to have an inflationary effect on the economy and thus is often used during recessions to stimulate consumption, investment, and employment. See alsodeficit financing; John Maynard Keynes.
Variants of NATIONAL DEBT
national debt or public debt
This entry comes from Encyclopædia Britannica Concise. For the full entry on national debt, visit Britannica.com.
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