National Debt

National debt means the total amount of money a government owes. In simple terms, national debt is the money a country’s government has borrowed and not yet paid back. National debt is important because it can affect government budgets, interest payments, taxes, public services, and investor confidence. When national debt grows, the government may need to spend more money on interest instead of other priorities. For example, if a government runs deficits year after year and borrows money to cover them, those unpaid borrowed amounts add to the national debt. National debt is not the same as a deficit. A deficit is the shortfall in one period, while national debt is the total amount owed over time.