Over 47% of the personal income taxes collected in 2003 will be spent on paying interest on the debt.
Government savings bonds are part of the national debt. As are loans from banks, and what are called Treasury Bills (T-Bills). But it is also in unfunded liabilities like pension plan payments and by some measures, Social Security. Bonds sold for infrastructure projects are also part of the national debt. Some economists, but not all, include sums related to bills the government must pay for goods and services it has contracted for in the current fiscal year.
The debt is owed to a number of sources. Individual Americans and businesses by savings bonds and T-bills. Much of the debt is held overseas, however. This is especially true of Japan which buys large amounts of the debt to cover its trade surplus. In recent years China has also become a major holder of American debt.
There is a question among economists in the United States as to whether the debt held by the 50 individual states is really part of the "national debt."
One way to calculate the U.S. national debt is the absolute number -- for instance the United States Congress, as it does virtually every year -- increased the dollar amount of debt allowable by law to just shy of Three Trillion Dollars ($3,000,000,000,000) for the fiscal 2004 year. This is done to take into account current government borrowing to pay for deficit spending. However, some of this money isn't payable for 10, 20 or 30 years, so we aren't actually paying this money out at one time.
Another way is by the percentage of debt in relation to the gross domestic product. By this measure, the national debt taken during the the World War II (about 125% of GDP) started first decreasing sharply, then by mid 1950s the rate was slowing down and by 1964 the ratio had reached it's pre-war figure (32% of GDP). In the beginning of 1980 the debt started rising again and in 2002 the debt was about 60% of the GDP. The debt of United States is much lower than what it is in many other developed countries, such as Japan and many parts of the western Europe, where the debt is generally over 100% of GDP.
Yet another way is by the amount payable in any given year. As a down-home example, if you owe $50,000 on a mortgage that is payable over 30 years -- is your debt $50,000? Is it the $50,000 plus the interest? Or is it the actual amount you pay this year and not the whole amount? Your answer determines as whether you can 'pay' the debt. And debts you can pay can't be all that bad.
With the definition shifting of what exactly do you mean by the national debt it them becomes easy to argue in political debate the way that suits your purpose.
In several cities around the United States, but most famously at the corner of West 43rd Street and Sixth Ave (Avenue of the Americas)in New York City, there are national debt clocks -- electronic billboards which supposedly show the amount of money owed by the government. These show different numbers because being politically motivated they count the debt in different ways.
There are different ways to lower, or pay off, the national debt. Though, if you consider social security as part of the national debt of the United States than the debt can never be totally paid off.
One is through increased tax revenues. Another is to not incur new debt, and use current revenues to pay off the bonds sold and the loans taken. The most insidious and destructive way to handle debt is through inflation -- which is nothing more than the government printing money. United States government can't actually use this method as the sole right to print money is given by the law to the Federal Reserve (Central Bank).
The most common method used today is by growing the nation's GDP. The hope is that the deficit spending that increses the debt will increse GDP by a greater amount, and thus in relative terms the debt would decrease.
National Debt can be held by the citizens of the country, or by institutions outside of the country. Unlike the debt of a corporation though, a holder of the debts owed by governments can't force the government into bankruptcy to pay the debt.