Public Debt

Public debt, also known as government debt or sovereign debt, represents the total outstanding financial obligations of a country's government. It consists of bonds and other securities issued by the government to finance public spending and cover budget deficits.

Key aspects of public debt include:

1. Composition: Public debt comprises both internal debt (owed to domestic lenders) and external debt (owed to foreign lenders).

2. Measurement: It is often expressed as a percentage of Gross Domestic Product (GDP), serving as an indicator of a government's ability to meet future obligations.

3. Components: In the United States, public debt includes Treasury bills, notes, bonds, Treasury Inflation-Protected Securities (TIPS), and other government securities.

4. Economic impact:

   Public debt has significant implications for a nation's economy:

   1. Fiscal Flexibility: High debt levels can limit a government's ability to respond to economic crises.

   2. Crowding Out Effect: High public debt can reduce private capital for…