US gross national debt passes 40 trillion dollars for the first time

The gross public debt of the United States reached 40.047 trillion dollars on Tuesday, according to data released by the Treasury Department. It is the first time the figure has crossed that threshold, and it has arrived earlier than expected: the Congressional Budget Office had projected 39.4 trillion by the end of fiscal 2026 and placed the jump to 40 trillion in 2027. Of that total, 32.266 trillion is debt held by the public — private investors, funds and foreign holders — and 7.782 trillion is intragovernmental debt, meaning securities the federal government owes to its own trust funds, among them social security. Gross debt is equivalent to 124% of gross domestic product, the highest level since the Second World War. The figure comes at a time of rising borrowing costs. The yield on the 30-year Treasury bond climbed to 5.3%, its highest since 2007, forcing the government to refinance at the steepest rates since before the 2008 financial crisis. Markets attribute the rise to doubts over the path of inflation and the deficit, to spending linked to the war with Iran, and to borrowing by large technology companies to fund artificial intelligence investment. The deficit for the fiscal year ending on September 30 is projected at 2.1 trillion dollars, close to 6% of GDP. July's monthly shortfall reached 432.3 billion, the largest in more than five years. The cost of servicing the debt will rise to 1.4 trillion this year and is expected within two years to exceed social security as the largest single item of government spending. “The gross national debt has doubled in the last ten years; in less than twenty years, it has quadrupled,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan organisation. A decade ago the figure stood at 19.4 trillion. The increase is not the work of a single administration. It grew sharply under Joe Biden, with the spending programmes deployed during the pandemic, and has accelerated since Donald Trump's return, driven by military spending, refunds of tariffs struck down in the courts and the tax cuts included in the budget law passed at the start of his second term. Treasury Secretary Scott Bessent said this month that the administration inherited “a mess” from its predecessor, and announced he would double debt buybacks in secondary markets to bring down financing costs. The Congressional Budget Office warned earlier this year that the fiscal trajectory “is not sustainable” and projected that debt held by the public will rise from 101% of GDP this year to 120% in 2036, surpassing the record 106% recorded in 1946. Top Comments Disclaimer & comment rulesNo comments for this story Please log in or register (it’s free!) to comment. Login with Facebook