Title: That $22 trillion national debt number is huge, but here's what it really means
Headings: That $22 trillion national debt number is huge, but here’s what it really means
That $22 trillion national debt number is huge, but here’s what it really means
Key Points

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There are two more relevant metrics, though, when thinking about national debt. One is the percentage of debt as compared to gross domestic product. That’s an important measure because it gauges both the ability of the government to pay its tab through growth, and because it helps measure bang for the buck in terms of how much growth the debt has helped generate. Total debt compared to the economy remained pretty low for decades until it began to climb in the early 1980s while President Ronald Reagan fought the Cold War against the former Soviet Union. Debt to GDP was about 30.6 percent when Reagan took office in 1981, then steadily climbed to a peak of 65.3 percent in mid-1995, according to data from the St. Louis Federal Reserve. Then-President Bill Clinton and the Republican-controlled Congress eventually carved out a short-lived government surplus, resulting in less of a need to borrow and the level to fall to 30.9 percent in the second quarter of 2001. From there, borrowing to finance two wars along with two recessions sent debt to GDP to 77.3 percent by the time Obama took office. When Obama left, the level had risen to 103.6 percent. Under Trump, there’s been only a small uptick in that regard, with the level standing now at 104.1 percent. The other relevant metric is debt held by the public, which parses out “intragovernmental holdings,” or money the government borrows to operate from its various trust funds like Social Security and Medicare.