Number: RL33570
Title: U.S. External Debt: How Has the United States Borrowed Without Cost?
Authors: Craig K. Elwell, Government and Finance Division 
Abstract: Over the past 15 years, the U.S. current account has moved from a small surplus to a deficit that in 2005 was nearly $800 billion. The final tally for 2006 has not been completed, but preliminary data suggests the deficit will grow to near $900 billion. The current account deficit has increased also as a share of gross domestic product (GDP), climbing from near zero to a record 6.2% in 2005. Because a current account deficit is a reflection of a concurrent net inflow of borrowed funds from the rest of the world, the accumulation of debt from a long succession of large annual deficits has caused the United States to move from being a small net creditor to the rest of the world to being a large net debtor. The net accumulation of liabilities through 2005 is $2.7 trillion, which is equivalent to about 22% of U.S. GDP.
Pages: 8
Date: January 19, 2007