I've noticed that many people don't quite understand how the U.S. national debt was formed and why it continues to grow. I decided to look into the history of the issue because it directly affects the global economy and the cryptocurrency market.

It all started back during the War of Independence. The U.S. borrowed money from other countries and its citizens to finance the war against Britain. By 1790, the debt was already about 75 million dollars. Then, in the 19th century, it got even worse — the Civil War required huge expenses for the army and armaments, so the debt grew rapidly.

But the real explosion happened in the 20th century. In the 1930s, when the Great Depression broke out, the government began actively borrowing to fund programs like the New Deal. Then came World War II — that broke all records. After the war, the U.S. external debt exceeded 100% of GDP. It was just a crazy time.

Why does the debt keep growing? There are several reasons. First, constant budget deficits — expenses always exceed income. Second, military spending — wars, defense, foreign interventions. Third, social programs like Medicare and Medicaid, which cost insanely high amounts. Plus, presidents periodically cut taxes — Reagan in the 1980s, Bush in the 2000s, Trump in 2017. Financial crises also add to the debt — in 2008 and during COVID-19 in 2020, the government simply started printing money to save the economy.

What’s interesting — about 70% of this debt is held by Americans themselves. The Federal Reserve, pension funds, banks, ordinary investors. The remaining 30% is the U.S. external debt, meaning held by foreign investors. The leading countries in holding U.S. debt are Japan, China, the United Kingdom, and many others.

Currently, the situation is this: the U.S. national debt has surpassed 34 trillion dollars. That’s more than 120% of the country’s GDP. Officially, the U.S. continues to service the debt by paying interest, but regarding the future — concerns are growing. Many economists say that such a level of external debt cannot be sustained indefinitely. It could seriously impact the stability of the financial system as a whole. For the crypto community, this has always been one of the arguments in favor of decentralized assets, so the topic remains relevant.