National Debt FAQ’s: Understanding How the National Debt Got to Be So...

How did the national debt get to be so big

The government has been increasing its spending — particularly on such items as , and, for a time, national defense — at a rate faster than revenues have been growing. Also, there is a snowball effect resulting from each increase in the debt: As the debt expands, so do the interest payments. In addition, the high inflation and interest rates of the 1970s and early 1980s contributed to the rapidly growing debt. Even with inflation and interest rates declining in recent years, the debt has not been reduced because spending has continued to outpace revenues. SOURCE: Federal Reserve Bank of New York

National Debt Glossary

Looks up the key terms for understanding America's financial crisis

Frequently Asked Questions National Debt

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