Just how big is the U.S. government’s debt?

Like most questions related to a person or organization's finances, the answer is entirely about perspective. In the case of the U.S. government, the size of its total debt largely depends on how you look at the situation. An analyst could approach it from the angle of yearly deficits, debt held by the American taxpayer or the absolute total amount of debt and outstanding liabilities.

To help illustrate this point, we'll look at each type of outstanding debt in succession and describe how it relates to the debt numbers that are often discussed and paraded around by Congressional politicians and media pundits.

Let's start with the annual deficit. Art Cashin, an economist for UBS AG of Switzerland, posits that the 2013-2014 fiscal year deficit will be roughly $1.1 trillion, though he conceded in a recent report that this figure could change depending on the final result of the fiscal cliff negotiations. Chris Cox and Bill Archer, writing for The Wall Street Journal, agree with this number, which accounts for roughly 7 percent of gross domestic product (GDP). A budget deficit means that more money is spent than is brought in – in the case of the United States, this fact means it must borrow to meet expenses that are not covered by tax and fee revenues.

To figure out the total amount of outstanding U.S. debt, we can turn to the Treasury Department's official estimates. According to their analysis, the American government owes roughly $11.57 trillion. Additionally, there is another $4.79 trillion in intragovernmental holdings, which are borrowings incurred after taking funds from other federal entities, including the Social Security trust fund. This all adds up to just over $16 trillion, a number that is often touted by politicians when they argue for spending cuts or tax increases.

To some, however, this is only the tip of the iceberg. Archer and Cox calculate that, by taking unfunded Social Security, Medicare, Medicaid and federal retirement liabilities into account, the actual U.S. debt is a mind-boggling $86 trillion, or more than 500 percent of GDP.

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