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Good Question: How did the U.S. debt get so high?

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Good Question: How did the U.S. debt get so high?


MINNEAPOLIS — If you wince when look at your monthly credit card bill, you might not believe what the U.S. government has racked up.

The national debt now tops more than $34 trillion. That’s a new record difficult to comprehend — and there are no signs of slowing it down.

How did the debt get so high? And will it need to be paid off? 

Well, that goal might be wishful thinking.

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The debt is one of the rare times people have a chance to use the word “trillion” in a sentence without exaggerating some number.

It stands at $34,009,690,055,595 as of Jan. 9. Elon Musk, the world’s richest person, is worth more than $241 billion. You’d need at least 140 of him to equal the debt.

“The first thing is about one-fourth to one-third of it doesn’t count,” said Christopher Phelan, an economics professor at the University of Minnesota. “It’s debt that’s held by another part of the government. So, it would be like the wife owing the husband money. It doesn’t affect the household. But the rest of it is still a huge number.”

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How did the U.S. accrue such a huge debt? One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues.

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To pay that deficit, the government borrows money. That can happen by selling marketable securities like treasury bonds. The national debt is the accumulation of the borrowed money, plus interest.

“Right now the federal government is spending 1.5 times as much as its taking in. So, an analogy that I’d like to give is imagine that a couple is making $80,000 between the two of them and spending $120,000 a year,” said Phelan. We asked him if the U.S. is the equivalent of a person who only makes the minimum payments on a credit card. Phelan took it a step further saying, “The U.S. is like somebody who makes less than the minimum payment on their credit card.”

The country was literally built on debt. It was $75 million in the red after the Revolutionary War thanks to loans from investors and countries like France. 

The Civil War led a to a huge spike, raising the debt from $65 million in 1860 to nearly $3 billion in 1865 when the war ended. Costly wars proved to be a theme in our nation’s history. The debt was at $49 billion right before the U.S. entered World War II. When the war ended, it was $260 billion. It began rising at a fast rate in the 1980’s and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.

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Who do we owe the money to? “Mostly ourselves,” said Phelan. “A lot of pension funds own government debt, money market funds own government debt and then people own those money market funds.” The U.S. also has debts to other countries.

Where does the money come from that would go towards paying off the debt? It ultimately comes down to the U.S. taxpayers. That means in order to pay it off, or at least make a larger dent in the debt, the federal government would have to raise taxes and cut spending. “The problem is way bigger than if we just cut foreign aid,” said Phelan.

With such a high debt, how does the country function? Phelan said it comes down to the debt to gross domestic product (GDP) ratio. That equation shows a country’s ability to pay down its debt. “This ratio is considered a better indicator of a country’s fiscal situation than just the national debt number because it shows the burden of debt relative to the country’s total economic output and therefore its ability to repay it,” according to the U.S. Treasury’s website. 

The current ratio in the U.S. is about 123 percent as of Sept. 2023. Two decades earlier in 2003, it was down to 60 percet. According to CEIC, the highest the ratio ever reached in the U.S. was 130.6 percent in March 2021, roughly one year into the pandemic.

While the ratio remains high for the country, Phelan said other countries are worse off, yet continue to run. Japan has a debt to GDP ratio that’s well over 200 percent, but that doesn’t mean countries should comfortably operate at those levels for a long time. “There is a limit, and it’s determined by when potential bond buyers say ‘I don’t think I’m gonna get the money back.’ And they demand a huge interest rate for risk of not getting the money back,” said Phelan, adding how that concern hasn’t happened yet for the U.S.

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Minnesota

AG Ellison joins lawsuit to block FEMA cuts

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AG Ellison joins lawsuit to block FEMA cuts


Attorney General Keith Ellison is joining a lawsuit with 19 other states to prevent the Trump administration from shutting down a FEMA grant program. More than a third of Minnesota’s counties were expected to receive funding from the program, called Building Resilient Infrastructure and Communities (BRIC), before it ended.  BRIC provides funding for state and […]



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Indictment returned against man accused of carrying out political assassination in Minnesota

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Indictment returned against man accused of carrying out political assassination in Minnesota


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Authorities released a two-page confession note and chilling photos of the alleged murder weapon used by Vance Boelter, the man charged with murdering State Representative Melissa Hortman and her husband, and attempting to kill Senator John Hoffman, his wife, and their daughter. NBC News’ Adrienne Broaddus has more. 

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Minnesota Lynx take down Chicago Sky 91-78

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Minnesota Lynx take down Chicago Sky 91-78


WCCO digital headlines: Afternoon of July 14, 2025

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WCCO digital headlines: Afternoon of July 14, 2025

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04:41

Napheesa Collier had 29 points, five assists and three steals, Courtney Williams added 18 points, eight rebounds, seven assists and four steals and the Minnesota Lynx beat the Chicago Sky 91-78 on Monday night.

Minnesota (19-4), which played its fourth game in six days, avenged an 87-81 loss to the Sky on Saturday.

Bridget Carleton opened the third quarter with a 3-pointer to give the Lynx a lead, 47-46, they would not relinquish the rest of the way.

Collier added a 3-pointer with 0.4 seconds left in the third, off a nice drive and assist from Williams, to extend Minnesota’s lead to 68-63. Collier also capped an 8-2 run to begin the fourth with two free throws to make it 76-65.

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Minnesota Lynx v Chicago Sky

CHICAGO, ILLINOIS – JULY 14: Napheesa Collier #24 of the Minnesota Lynx battles with Angel Reese #5 of the Chicago Sky during the fourth quarter at Wintrust Arena on July 14, 2025 in Chicago, Illinois. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.

Geoff Stellfox / Getty Images


Minnesota forced a turnover on three straight possessions late in the fourth and converted three layups at the other end for an 87-74 lead with 2:39 left.

Collier was 7 of 14 from the field, including 4 of 7 from 3-point range, and 11 of 11 at the free-throw line.

Kayla McBride added 17 points and Carleton scored 11 for the Lynx, who made 12 of 32 3-pointers.

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Angel Reese secured her ninth straight double-double for Chicago (7-14) with 22 points and 10 rebounds. Rachel Banham added 15 points and Rebecca Allen scored 10. Ariel Atkins, who scored 27 points on Saturday, left in the second quarter and did not return due to a leg injury.



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