Governments borrow. They issue bonds to pay for roads, schools, wars, and tax cuts. The total amount owed to creditors at any moment is the national debt, also called sovereign debt or public debt. In the United States, the figure has surpassed 34 trillion dollars. Japan's debt is roughly 250 percent of its GDP, the highest among major economies.

Debt accumulates when a government runs deficits year after year. It can also shrink when surpluses allow repayment or when inflation erodes the real value of existing debt. The debt is owed to a mix of creditors: domestic citizens and institutions, foreign governments, and central banks. About a quarter of U.S. debt is held by foreign countries, with Japan and China among the largest holders.

Is national debt dangerous? It depends. Debt denominated in a country's own currency is easier to manage because the government can print money to repay it, though that risks inflation. Debt in foreign currency is far more dangerous, as Argentina and Greece have discovered. The real constraint is not the absolute number but the ratio of debt to GDP, the interest rate on that debt, and the credibility of the government's promise to repay.

Debt facts

• U.S. national debt exceeds 34 trillion dollars
• Japan's debt is about 250 percent of GDP
• Creditors include domestic and foreign holders
• Debt in foreign currency is riskier
• Debt-to-GDP ratio is the key metric