Government Held Internal Debt

• Government held internal debt is when the government borrows money from itself via trust funds and other accounts. Governments borrow from one federal account that has a surplus and deposit that money into another account that has a deficit.
  
  

Publicly Held Internal Debt

• Publicly held internal debt is when the government has sold securities such as Treasury bills and government bonds to private citizens and commercial lenders within the country.
  
  

External Debt

• When the government sells government backed securities to foreign citizens, governments and commercial lenders, it is known as external government debt.