[ Music ]>>The federal debt, also known as the gross debt, has two very different components. Debt held by government accounts is money the federal government owes another part of the federal government. This is composed mostly of trust funds, such as social security and Medicare. Debt held by the public is federal debt held by investors outside of the government. When you buy a savings bond, or when your retirement account invests in U.S. Treasury Securities, you’ve lent money to the federal government. In the last 15 years, debt held by the public has nearly doubled. But it is the long-term future growth that raises the most concern. Such a growing debt burden will reduce the government’s flexibility to respond to new or unexpected challenges. And if interest rates rise, those payments will use up a growing part of the federal budget, putting a squeeze on federal spending in areas such as national defense, education, and infrastructure. As a whole, debt can really only be understood compared to the wealth available to carry it. We measure debt compared to gross domestic product, or GDP, which is the value of the goods and services produced in the United States. But what makes the debt rise and fall? If we look at federal debt held by the public as a share of GDP, we see debt peak historically as a result of budget deficits during wars and recessions, falling again after those events. Is today’s debt burden too high? The real issue is the path we’re on. Debt was higher than what our economy produced in 1946, but that was the overhang from fighting in World War II. Today we see that unless there are policy changes, debt will grow faster than our economy. This is not sustainable. The federal government will need to make tough choices to set priorities and ensure that the resources it expends lead to the results it wants. GAO has identified numerous opportunities for the federal government to save tax dollars and enhance revenue. Explore more about what the federal debt is, and what it isn’t in the Fiscal Outlook section of gao.gov.