How much does the government spend and where does the money go? How does this affect the national debt?
The federal government’s total public debt stood at just under $31.46 trillion as of Feb. 10, according to the Treasury Department’s latest daily reckoning. Nearly all of that debt – about $31.38 trillion – is subject to the statutory debt limit, leaving just $25 million in unused borrowing capacity.
Trend chart over time showing that U.S. national debt has long exceeded gross domestic product For several years, the nation’s debt has been bigger than its gross domestic product, which was $26.13 trillion in the fourth quarter of 2022.
The Federal Reserve Banks own almost one-fifth of U.S. government debt in 2022. Today, the Federal Reserve System is the single largest holder of U.S. government debt. While the Fed regularly buys and sells Treasury securities to execute monetary policy, it bought Treasuries in massive quantities during the COVID-19 pandemic in an effort to keep the U.S. economy from buckling under the strain of shutdowns and quarantines.
At its peak in April 2022, the Fed held more than $6.25 trillion in U.S. government debt, more than double its holdings just before the pandemic hit the U.S. in March 2020.
