Federal debt held by the public totals $107,000 per household
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The federal debt held by the public totals more than $13 trillion, or about $107,000 per household in the United States, according to a report released this month by the Cato Institute.
The report, titled "Washington's Largest Monument: Government Debt," suggests that growing debt, which has doubled over the past seven years, poses a burden on future taxpayers and could lead to a financial crisis.
According to Cato, financing government debt through tax collection creates distortions since much of federal spending goes to subsidy and benefit programs, which reduce work incentives and savings.
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One economist says that "it costs taxpayers $3 to provide a benefit worth $1 to recipients."
In addition to misallocating resources, growing debt may cause private investment and saving to decline. "Businesses may be reluctant to make long-term investments if high and rising debt creates fears of tax increases down the road," states the report.
Debt held by the public is a different measure than the widely reported gross debt measure, which is now more than $18 trillion.
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Many Americans are increasingly concerned about the expansion of the federal debt and two thirds believe that it should be a top priority for Congress.