National Debt
The total debt or unpaid borrowed funds, carried by the federal government
Real World Example
During the period of 1785-1805, the national debt was a crucial issue as the newly-formed United States needed funds to pay off debts from the Revolutionary War. Alexander Hamilton, the first Secretary of the Treasury, proposed that the federal government assume state debts to establish strong national credit and unify the country financially. This concept was important because it helped build trust with other nations and American citizens, ensuring the country's financial stability and growth. Today, the national debt still matters because it affects government spending, interest rates, and economic health. For example, if the government borrows too much, it might lead to higher taxes or reduced funding for public services like schools and roads, impacting everyday life.
Practice Version
