Macroeconomics › Section Q · Government budgets and fiscal policy › Topic Q.3
Federal deficits and the national debt
Each year's deficit adds to the national debt, now more than $40 trillion. Telling the yearly flow from the accumulated stock, and measuring both against the size of the economy, is the key to reading every headline about government borrowing.
In this topic
- A flow and a stock
- How the government borrows
- Measuring debt against GDP
- A century of deficits
- Why deficits swing with the economy
- The 2026 picture
- Worked example: the debt ratio in 2026
- Deficits with a falling debt ratio
- Worked example: a shrinking ratio
- The pressures ahead
- Common mistakes to avoid
- Key takeaways
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