question: How can the US government be almost $22 Trillion in debt when there's only about $2 Trillion in circulation?
comment: Those two numbers aren't directly connected. I'm not sure where you're getting a number of $2 trillion in circulation but it doesn't count money that has been lent to the US government. For example, you have an extra $100 that you don't need right now and you want to invest it. You buy a US Treasury Bond with that $100. The government now has your money and you have a promise from them to pay you that money back, with interest, at some point in the future. The government now has a little over $100 more in debt than it had before.
passages: BULLET::::- Total U.S. household debt, including mortgage loan and consumer debt, was $11.4 trillion in 2005. By comparison, total U.S. household assets, including real estate, equipment, and financial instruments such as mutual funds, was $62.5 trillion in 2005.
  
  BULLET::::- Total U.S. Consumer Credit Card revolving credit was $931.0 billion in April 2009.
  
  BULLET::::- The U.S. balance of trade deficit in goods and services was $725.8 billion in 2005.
   Note that the total federal government debts recognized by SIFMA are significantly less than the total bills, notes and bonds issued by the U.S. Treasury Department, of some $19.8 trillion at the time. This figure is likely to have excluded the inter-governmental debts such as those held by the Federal Reserve and the Social Security Trust Fund.
  
  Section::::Volatility.
  
  For market participants who own a bond, collect the coupon and hold it to maturity, market volatility is irrelevant; principal and interest are received according to a pre-determined schedule.
   In 2005, the Federal Reserve held approximately 9% of the national debt as assets against the liability of printed money. In previous periods, the Federal Reserve has used other debt instruments, such as debt securities issued by private corporations. During periods when the national debt of the United States has declined significantly (such as happened in fiscal years 1999 and 2000), monetary policy and financial markets experts have studied the practical implications of having "too little" government debt: both the Federal Reserve and financial markets use the price information, yield curve and the so-called risk free rate extensively.
   BULLET::::- 2003: 110.5% of households’ gross disposable income
  
  Non-financial corporations
  
  BULLET::::- 2003: 110.5% of GDP
  
  Government
  
  BULLET::::- 2003: 141.3% of GDP
  
  Section::::Levels.:United States.
  
  Dollar amounts are debt owed by each sector (amounts borrowed by each sector)
  
  Credit market debt
  
  BULLET::::- 2008/Q1: $49.6 trillion (349% of GDP)
  
  Household sector
  
  BULLET::::- 2008/Q1: $13,959.9 billion (99% of GDP) (% of "households’ gross disposable income")
  
  Domestic Financial sectors
  
  BULLET::::- 2008/Q1: $15.9 trillion (112% of GDP)
  
  Nonfinancial corporate business
  
  BULLET::::- 2008/Q1: $6.474 trillion (46% of GDP "Non-financial corporations")
  
  Nonfarm noncorporate business
  
  BULLET::::- 2003: $2.241 trillion
  
  Farm business
  
  BULLET::::- 2003: $208 billion
  
  Government
   The ratio is higher if the total national debt is used, by adding the "intragovernmental debt" to the "debt held by the public." For example, on April 29, 2016, debt held by the public was approximately $13.84 trillion or about 76% of GDP. Intra-governmental holdings stood at $5.35 trillion, giving a combined total public debt of $19.19 trillion. U.S. GDP for the previous 12 months was approximately $18.15 trillion, for a total debt to GDP ratio of approximately 106%.
  
  Section::::Valuation and measurement.:Calculating the annual change in debt.
   Government receipts and expenditures are normally presented on a cash rather than an accrual basis, although the accrual basis may provide more information on the longer-term implications of the government's annual operations. The United States public debt is often expressed as a ratio of public debt to gross domestic product (GDP). The ratio of debt to GDP may decrease as a result of a government surplus as well as due to growth of GDP and inflation.
  
  Section::::Valuation and measurement.:Fannie Mae and Freddie Mac obligations excluded.
   The U.S. Treasury statistics indicate that, at the end of 2006, non-US citizens and institutions held 44% of federal debt held by the public. , China, holding $1.26 trillion in treasury bonds, is the largest foreign financier of the U.S. public debt.
  
  The overall financial position of the United States as of 2014 includes $269.6 trillion of assets owned by households, businesses, and governments within its borders, representing more than 15.7 times the annual gross domestic product of the United States. Debts owed during this same period amounted to $145.8 trillion, about 8.5 times the annual gross domestic product.
   Most debt owed by the US financial sector is in the form of federal government sponsored enterprise (GSE) issues and agency-backed securities. This refers to securities guaranteed and mediated by federal agencies and GSEs such as Ginnie Mae, Fannie Mae, and Freddie Mac, among others. This group also includes the mortgage pools that are used as collateral in collateralized mortgage obligations. The proportion of financial sector debt owed in the form of GSE and federally related mortgage pools has remained relatively constant – $863 million or 47% of total financial sector debt in 1946 was in such instruments; this has increased to 57% of financial sector debt in 2009, although this now represents over $8 trillion.
   BULLET::::- 2002: ? (?) (Q4 2002 report)
  
  Section::::Flows.:United States.
  
  US Investment grade
  
  BULLET::::- 2003: 659 (1,868) (Q4 2003 report)
  
  BULLET::::- 2002: 549 (?) (Q4 2003 report)
  
  All US Federal Credit Agency Debt. FHLB dominated the agency market in 2003, raising $545.5 billion in proceeds, a 35% increase in volume from 2002.
  
  BULLET::::- 2003: 1,191 (13,152) (Q4 2003 report)
  
  BULLET::::- 2003: 923 (?) (Q4 2003 report)
  
  US Mortgage-backed Securities
  
  BULLET::::- 2003: 900 (1,203) (Q4 2003 report)
  
  BULLET::::- 2002: 805 (?) (Q4 2003 report)
  
  US Asset-backed securities
  
  BULLET::::- 2003: 581 (1,175) (Q4 2003 report)
  
  BULLET::::- 2002: 456 (?) (Q4 2003 report)
   Because a large variety of people own the notes, bills, and bonds in the "public" portion of the debt, Treasury also publishes information that groups the types of holders by general categories to portray who owns United States debt. In this data set, some of the public portion is moved and combined with the total government portion, because this amount is owned by the Federal Reserve as part of United States monetary policy. (See Federal Reserve System.)
   Both the debt held by the public in dollars and as ratio relative to the size of the economy (GDP) are common measures. The CBO reports these amounts since fiscal year 1967 in the "Historical Budget Data" accompanying their "Budget and Economic Outlook" report, published annually in January.
  
  BULLET::::- Debt held by the public grew in dollars an average of 12% per year from 2008 through 2016, rising from $5.8 trillion in 2008 to $14.2 trillion in 2016.
   The total federal debt is divided into "debt held by the public" and "intra-governmental debt." The debt held by the public refers to U.S. government securities or other obligations held by investors (e.g., bonds, bills and notes), while Social Security and other federal trust funds are part of the intra-governmental debt. As of September 30, 2012 the total debt was $16.1 trillion, with debt held by the public of $11.3 trillion and intragovernmental debt of $4.8 trillion. Debt held by the public as a percentage of GDP rose from 34.7% in 2000 to 40.3% in 2008 and 70.0% in 2012. U.S. GDP was approximately $15 trillion during 2011 and an estimated $15.6 trillion for 2012 based on activity during the first two quarters. This means the total debt is roughly the size of GDP. Economists debate the level of debt relative to GDP that signals a "red line" or dangerous level, or if any such level exists. By comparison, China's budget deficit was 1.6% of its $10 trillion GDP in 2010, with a debt to GDP ratio of 16%.
   State and local governments have significant financial assets, totaling $2.7 trillion in 2009. In 2009, these included $1.3 trillion in credit market debt (that is, debt owed by other sectors to state and local governments). These figures do not include state and local retirement funds. State and local retirement funds held $2.7 trillion in assets at the end of 2009.
  
  Section::::Debt.:Federal government.
  
  In 1946, the federal government owed $251 billion of debt or 102.7% of GDP. By 2009 this figure had risen to $7.8 trillion, but the federal government's debt-to-GDP ratio had fallen to 54.75%.
   Section::::Valuation and measurement.:Accounting treatment.
  
  Only debt held by the public is reported as a liability on the consolidated financial statements of the United States government. Debt held by government accounts is an asset to those accounts but a liability to the Treasury; they offset each other in the consolidated financial statements.
   As estimated by the Bond Market Association, in the United States, the total amount outstanding at the end of 2004 was $1.8 trillion. This amount was about 8 percent of total outstanding bond market debt ($23.6 trillion), about 33 percent of mortgage-related debt ($5.5 trillion), and about 39 percent of corporate debt ($4.7 trillion) in the United States. In nominal terms, over the previous ten years (1995–2004) ABS amount outstanding had grown about 19 percent annually, with mortgage-related debt and corporate debt each growing at about 9 percent. Gross public issuance of asset-backed securities was strong, setting new records in many years. In 2004, issuance was at an all-time record of about $0.9 trillion.
   Debt issued by the government of the United States, called Treasuries, serves as a reference point for all other debt. There are deep, transparent, liquid, and open capital markets for Treasuries. Furthermore, Treasuries are issued in a wide variety of maturities, from one day to thirty years, which facilitates comparing the interest rates on other debt to a security of comparable maturity. In finance, the theoretical "Risk-free rate" rate is often approximated by practitioners by using the current yield a Treasury of the same duration.
   These may be traded but will only rarely be spent on goods and services. In this way, the expected increase in inflation due to the increase in national wealth is lower than if the government had simply created the money "de novo" and increased the more liquid forms of wealth (i.e., the money supply).
   If the government has the ability to print money, and therefore monetize the outstanding debt, the budget constraint becomes:
  
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   These figures also do not include debt that the federal government owes to federal funds and agencies such as the Social Security Trust Fund. It also does not include "unfunded liabilities" to entitlement programs such as Social Security and Medicare either as debt or accounting liabilities. According to official government projections, the Medicare is facing a $37 trillion unfunded liability over the next 75 years, and the Social Security is facing a $13 trillion unfunded liability over the same time frame.
  
  Section::::Debt.:Federal government.:Negative real interest rates.
   (Note: these data obviously do not include financial assets, such as estimated by the McKinsey Quarterly, only "tangible" assets in US territory. The total value of "marketable" financial assets in the USA was estimated in 2007 at about US$46 trillion . This total obviously does not include assets, deposits and reserves that are not traded. The data series on national wealth provided in the budget annex were discontinued by the administration of President Barack Obama).
  
  Section::::See also.
  
  BULLET::::- Capital (economics)
  
  BULLET::::- Capital accumulation
  
  BULLET::::- Constant capital
  
  BULLET::::- Consumption of fixed capital
  
  BULLET::::- Debt
  
  BULLET::::- Double counting (accounting)
   $5.7 trillion of "gross" debt was issued in 2004 according to Thomson Financial numbers, while GDP grew $4 trillion (currency exchange rate). That does not mean that "net" debt grew faster than GDP on a worldwide average (even if it has done so for years after 2001 in the USA), as debt issuance may be refinancing of existing debt, often "rolling over" debt that comes due into new debt. When debt matures new debt is many times issued to repay the old debt, perhaps from the same creditor. That is one reason why debt issuance far surpasses equity issuance in currency value.
   Section::::Derivatives.
  
  Figures of total debt typically do not include other financial obligations such as derivatives. Partly this is due to the complexities of quantifying derivatives – the United States Comptroller of the Currency reports derivative contracts in terms of notional value, net current credit exposure, and fair value, among others.
   Section::::Valuation and measurement.
  
  Section::::Valuation and measurement.:Public and government accounts.
  
  As of December 31, 2018, debt held by the public was $16.1 trillion and intragovernmental holdings were $5.87 trillion, for a total of $21.97 trillion. Debt held by the public was approximately 77% of GDP in 2017, ranked 43rd highest out of 207 countries. The Congressional Budget Office forecast in April 2018 that the ratio will rise to nearly 100% by 2028, perhaps higher if current policies are extended beyond their scheduled expiration date.
   The Federal Reserve issues routine reports on the flows and levels of debt in the United States. As of the first quarter of 2010, the Federal Reserve estimated that total public and private debt owed by American households, businesses, and government totaled $50 trillion, or roughly $175,000 per American and 3.5 times GDP.
  
  Interest payments on debt by US households, businesses, governments, and nonprofits totaled $3.29 trillion in 2008. The financial sector paid an additional $178.6 billion in interest on deposits.
   BULLET::::- Without adequate, comprehensive observational data from direct surveys, many of the statistical inferences made are simply not truly verifiable. All one can then say about the estimates is, that they are "probably fairly accurate, given previous and other concurrent data."
  
  A typical reply of statisticians to this kind of objection is that although it is preferable to have comprehensive survey data available as a basis for estimation, and although data errors and inaccuracies do occur, it is possible to find techniques which keep the margins of error within acceptable bounds.
  
  Section::::See also.
  
  BULLET::::- Balance of payments
  
  BULLET::::- Capital account
  
presuppositions: The amount of debt has to be equal to or less than the amount of money in circulation. Debt and money in circulation for the US economy is related.
corrections: The amount of the debt and the amount in circulation aren't directly connected. Debt and money in circulation for the US economy aren't directly connected.
raw_presuppositions: The amount of debt has to be equal to or less than the amount of money in circulation. Debt and money in circulation for the US economy is related.
raw_corrections: The amount of the debt and the amount in circulation aren't directly connected. Debt and money in circulation for the US economy aren't directly connected.