What is the national debt?

The national debt refers to the total amount of money that a government has borrowed and still owes to creditors over time. This encompasses all outstanding debts accumulated through various means, such as issuing government bonds, borrowing from foreign governments, and taking out loans. National debt reflects the cumulative amount that has arisen from past deficits, where spending has exceeded revenues collected from taxes and other sources.

Understanding the concept that the national debt is the aggregate of all money borrowed since the country's inception helps to clarify its significance in government finance and economic policy. It provides insight into how fiscal policies have been implemented and how they potentially affect the country's economy, interest rates, and financial stability over time.

In contrast, other options like the annual budget deficit refer specifically to the difference between government spending and revenue within a single fiscal year, rather than encompassing the total debt over the years. Similarly, total assets would indicate ownership rather than liabilities, and the amount of taxes collected would refer to revenue rather than outstanding obligations. Thus, identifying the national debt as the total amount borrowed since independence accurately captures its definition and implications.