A historic milestone

The US gross national debt has surpassed $40 trillion for the first time, according to Treasury Department data released Wednesday. Total public debt outstanding stood at $40.047 trillion as of Tuesday, with $32.266 trillion held by the public and $7.782 trillion in intragovernmental holdings, as reported by several outlets including Africa News and the Jerusalem Post.

The milestone arrived months earlier than expected. The Congressional Budget Office had projected the debt would reach $40 trillion only in 2028, Al Jazeera noted, and a separate forecast put overall borrowing at $39.4 trillion by the end of fiscal year 2026, a figure France 24 said was already outstripped.

Debt growth under multiple presidencies

The national debt has more than doubled since January 2017, when it stood at $19.95 trillion, according to Treasury data cited by Al Jazeera and the Jerusalem Post. Roughly one-third of that increase occurred during the COVID-19 pandemic response under Presidents Trump and Biden.

Debt rose by $7.8 trillion during Trump's first term, by $8.4 trillion under Biden, and by $3.8 trillion since Trump took office again in January 2025, for a total increase of $11.6 trillion across his two terms so far, Al Jazeera reported. The Guardian offered slightly different figures, stating Trump approved $8.4 trillion in debt in his first term and Biden $4.3 trillion, but both accounts point to sustained borrowing under both administrations.

The interest burden grows

Interest costs have become a major driver of the debt's expansion. The US now pays roughly $1 trillion annually in interest, TASS reported, and interest payments of $827 billion in the first nine months of fiscal year 2026 exceeded defense spending of $713 billion, according to Africa News. Al Jazeera noted that interest costs of $1.1 trillion exceeded Pentagon funding in 2025 and have become the second-largest line item in the budget, behind Social Security.

These costs reflect rising yields on long-term Treasury bonds, which France 24 said reached their highest level since 2007. The Jerusalem Post reported that yields on 30-year Treasuries hit the highest level since 2021 at a recent auction, and the term premium for 10-year Treasuries reached its highest in over a dozen years. TASS cited a 30-year yield above 5.27%.

To steady the bond market, the Treasury Department announced it would double the size of its bond buyback operations to at least $4 billion each, Treasury Secretary Scott Bessent said, as reported by the Jerusalem Post. France 24 noted that the Treasury's intervention on Wednesday sent yields lower, though the effect was short-lived.

Deficits and the spending mix

The federal government has run annual deficits for years, spending more than it collects in revenue. The deficit for the first 10 months of fiscal 2026 has already exceeded the total deficit for all of fiscal 2025, according to Al Jazeera and the Jerusalem Post. July alone saw a $432 billion deficit, the fourth-highest monthly figure in US history, driven partly by tariff refunds and growing Social Security and Medicare outlays.

Mandatory programs account for 60% of the roughly $7 trillion annual federal budget, Al Jazeera reported. These include Social Security, Medicare, and other benefit programs whose costs are rising as the population ages. The Department of Government Efficiency, a nongovernmental body, has cut between 250,000 and 350,000 federal jobs since early 2025, but those cuts have mostly affected discretionary spending, leaving mandatory programs largely untouched.

Tax cuts have also reduced revenue. The One Big Beautiful Bill Act, signed in 2025, is estimated by the Congressional Budget Office to add $4.7 trillion to the debt, according to the Jerusalem Post and Al Jazeera. The Guardian reported a slightly different CBO estimate of $3.3 trillion in deficit increases.

A political fault line

Both Democrats and Republicans expressed outrage at the milestone, though they drew different conclusions, The Guardian reported. Democrats blamed Trump and the Republican-controlled Congress for the spending.

Senator Mark Kelly said on X that Trump "ran it up to $40 trillion while he and his family made billions," while Congresswoman Jasmine Crockett accused Republicans of "maxing out the card" while lecturing working families about fiscal responsibility. Congressman Jason Crow called the One Big Beautiful Bill Act "shameful" for providing tax breaks to billionaires and corporations.

Republicans, for their part, called for spending restraint. Senator Rick Scott posted that "Congress needs to get spending under control," though critics noted he voted for the One Big Beautiful Bill Act. Congressman Thomas Massie, who has worn a "debt badge" tracking the increase since 2021, said he "lost my re-election because I voted against the policies that caused this." Massie lost his primary in May to Ed Gallrein, a candidate backed by Trump.

Who holds the debt?

About 80% of the gross debt, or $32 trillion, is owed to domestic and foreign investors, Al Jazeera reported. Among foreign holders, Japan holds $1.203 trillion, the UK $889 billion, and China $683 billion, according to data from 2025. The remaining 20% is intragovernmental debt, owed to programs like Social Security trust funds.

The debt amounts to about $117,000 per person and $297,000 per household, Al Jazeera noted, and is roughly the combined size of the economies of China, Germany, Japan, the UK, and India, according to the Peter G. Peterson Foundation.

Looking ahead

The Congressional Budget Office projects the debt will rise from 101% of GDP in 2026 to 120% in 2036, Al Jazeera reported. The Peterson Institute for International Economics estimates the debt could reach $50 trillion in six years without reforms.

Economists warn of several potential consequences. Rising interest rates could crowd out private investment and slow growth, Al Jazeera noted. Higher borrowing costs for firms are often passed through to consumers, and higher US borrowing costs raise other countries' costs as well.

The "debt spiral" concern is central. "What I worry about is we're on the verge of sort of a real debt spiral, which happens when your interest [bill] is growing faster than your economy," Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, told TASS.

Maya MacGuineas, president of the same committee, said in a statement carried by multiple outlets: "$40 trillion of debt doesn't exist solely on the government's ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another." She called for a commitment to zero new borrowing and a bipartisan fiscal commission.

Others point to the limited policy options. "We have two levers to do that: raise taxes or cut spending," Adam Abbas of Oakmark Funds told TASS. "Either option is not politically popular, and it will never be popular, but at some point we have to address the problem."

Treasury Secretary Scott Bessent has set a goal of cutting the deficit to 3% of GDP, but as Jessica Riedl, a budget fellow at the Brookings Institution, told France 24, deficits are currently closer to 6-7% of GDP, a level that "has made markets nervous."