National Debt

National debt, also known as government debt or public debt, is money, or credit owed by any level of government; either central government, federal government, municipal government or local government. The main cause of government debt is overspending, which could be due to new construction, wars, more government jobs, etc. Governments usually borrow by issuing securities such as government bonds and bills. Short term debt is generally considered to be one year or less, long term is more than ten years. Medium term debt falls between these two boundaries.

Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders.