The U.S. national debt has just topped $20 trillion. That’s 20 million millions or $20,000,000,000,000. It’s a large number, and people are (justifiably) concerned.

While the federal government takes in taxes and other payments, these inflows aren’t enough to cover obligations ranging from national defense to health care to construction to wages. To make up the difference, the U.S. Department of the Treasury sells U.S. government securities to raise the necessary cash and to pay off maturing liabilities. Selling securities puts the federal government in debt to whomever buys them. While we all think our taxes are too high, the truth is that we actually pay for less than two-thirds of the things we receive from Uncle Sam.

For many years, the federal government has been in a deficit situation, meaning more was spent than was taken in. The debt is the accumulation of these deficits. Total debt outstanding was relatively stable from 1992 to 2001, trending generally upward from about $4 trillion to less than $6 trillion. It reached $10 trillion in 2008 (largely because of war expenses and tax cuts during the Bush administration). Total debt topped $16 trillion just four years later (due to a recession and the need for liquidity to help solve the financial crisis as well as large spending packages during a time when tax receipts were falling). During the eight years of President Obama’s tenure, debt almost doubled, from $10.6 trillion to $19.9 trillion by the time he left office.

This debt falls into two categories: “debt held by the public” and “debt held by government accounts.” Debt held by the public is essentially the amount the federal government has borrowed to finance cumulative cash deficits. Debt held by government accounts is cumulative surpluses (and interest) of trust funds such as Social Security and Medicare which have been invested in Treasury securities.

The debt held by the public is owned by investors outside of the federal government. There are sound reasons to invest in Treasury securities. They are backed by the full resources of the U.S. government and have historically been a very safe place to store cash. In fact, they have long been the world’s definition of a (politically) risk-free asset. Banks, pension funds, insurance companies, state and local governments, and individuals take advantage of this option and willingly hold them by the trillions.

Nearly six trillion in Treasury securities are held by foreign governments and international investors. While China had been the largest holder for a long while, Japan recently moved into the top spot. Other major holders of U.S. securities include the Cayman Islands, Switzerland, Luxembourg, United Kingdom, Hong Kong, Taiwan, India, Saudi Arabia, Belgium, and Singapore. This phenomenon is a fact of our global economy, and Americans also hold large volumes of the securities of foreign governments.

Given that the vast majority of debt (about $14 trillion) is basically money owed to various government agencies and Americans, it’s not as big a security issue as some people seem to think. In addition, national debt is different from the financial obligations of a household. For one thing, there is no end date, unlike a household where the natural cycle of life affects the future ability to repay. Also, although debt has climbed as a proportion of gross domestic product, it is still much lower than the proportion of common household debt (such as a mortgage) to yearly income. With the increasing uncertainty in the country and the world, the flight to quality will keep the demand for US debt robust. In other words, there is no imminent “doomsday scenario” of the type that is often espoused.

Even so, there are clear problems with a large national debt. According to basic economic theory, increases in government debt can lead to inflation because the indebted government has an incentive to follow policies that decrease the real cost of the debt (although this is far less likely in today’s world of largely autonomous central banks, and I don’t see the Federal Reserve giving in to such pressure). The other problem is “crowding out,” whereby savings dollars are diverted into Treasury securities rather than private vehicles (such as banks) which can relend the money into the economy in a productive way.

With regard to the debt ceiling (a statutory limit on the amount of securities which can be outstanding), there is no question that it should be raised before a problem occurs. The Treasury is making absolutely no decisions about whether or how to spend money; that task is handled by the President and the Congress through the budget process. Recently, a potential problem with the debt ceiling was avoided by “extraordinary measures,” which are rules that allow for what are basically accounting maneuvers to avoid exceeding the limit. To introduce the threat of some sort of default would be ridiculous and risky, and the Congress and administration need to act to ensure that we never reach that point. Despite all of the rhetoric that will likely accompany the upcoming debate, Congress will actually be doing nothing more than voting to pay the debts it has already incurred. It has nothing to do with future policy. Although the President made a bold promise to pay off the debt in eight yearsduring the campaign, his budget folks have already admitted that his administration will run a deficit every year (even if he serves two full terms) and add substantially to the debt during his tenure.

Twenty trillion dollars is a lot. The interest alone is significant and likely to rise in the future. It’s not a reason to panic, but it is a milestone that emphasizes the need to act. A sustainable revenue and spending pattern is in the interest of all of us, as well as generations of Americans to come. It is also achievable, but it takes both a long-term, multi-decade approach and bipartisan cooperation—two things that seem to be in short supply at the moment.