or public debt
Total indebtedness of a government, especially as evidenced by securities issued to investors.
The national debt grows whenever the government operates a budget deficit
that is, when government spending exceeds government revenues in a year. To finance its debt, the government can issue securities such as bond s or treasury bill s. The level of national debt varies from country to country, from less than 10% of the gross domestic product (GDP) to more than double it. Public borrowing is thought to have an inflationary effect on the economy and thus is often used during recession s to stimulate consumption , investment , and employment. See also deficit financing ; John Maynard Keynes .