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The government has been increasing its spending — particularly on such items as Social Security, Medicare 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.
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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
See all terms in the National Debt Glossary
Frequently Asked Questions: National Debt
- How did the national debt get to be so big?
- What's the difference between the debt and the deficit?
- Why can't the government just print more money to get out of debt?
- How much U.S. debt is owned by foreign countries?
See all questions about the national debt. >>