Why Does the U.S. Federal Debt Increase Every Year?


Quick Answer

The U.S. federal debt increases when revenue does not match spending by the government defined by the federal budget. When revenue falls short of spending in a given year, there is a budget deficit that the federal government needs to match through borrowing, according to the U.S. Government Accountability Office.

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Full Answer

The Federal debt is the amount owed to public borrowers as well as the amount owed to agencies within the government, explains the U.S. Government Accountability Office. When revenue exceeds federal spending, the government can pay debts with the budget surplus. The last annual budget surplus in the United States was $127 billion in 2001, notes CNN Money.

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