During WWII, the federal government used credit to finance military spending, and the national debt enormously. Publis debt (the amount owed by any level of government) has grown at a rapis rate. By far, the largest share of the public debt is the result of the federal government 's spending. The federal gowvenment uses credit to pay for many of the services it provides to American citizens, largely because it is unwilling to sufficiently increase by rasing taxes to pay for those services.

State and local governments more often balance their budgets. They also use credit to pay for things such as highways, housing, stadiums, and water systems. State and local governments collect taxes to help pay for these services. They must set aside part of their budgets to pay interest on their outstanding debts.

Quick Checks:
Which level of government has the largest share of the public debt?
What items might state and local government pay with credit?