The United States government’s total debt has crossed a historic threshold, reaching $40.05 trillion as of Tuesday, according to the Treasury Department.
The milestone arrives four and a half years after the national debt first surpassed $30 trillion, underscoring the rapid pace at which the government’s borrowing has accelerated.
A decade ago, the national debt stood at $19.4 trillion, meaning it has more than doubled in just ten years.
Years of escalating budget deficits, significantly worsened by stimulus spending during the Covid pandemic, have pushed the public share of the debt close to 100% of GDP.
The most recent monthly accounting revealed a $432.3 billion deficit in July alone, the highest monthly total recorded since March 2021.
The year-to-date shortfall is now nearing $1.8 trillion, already running higher than the equivalent period one year ago.
The Treasury Department announced Wednesday that it is increasing the size of its repurchases at the long end of the yield curve, a move likely connected to the worsening fiscal picture.
Treasury yields have surged since late June, reaching levels not seen since before the global financial crisis that prompted the Federal Reserve to cut benchmark rates to near zero.
Concerns over the debt and deficit situation, surging corporate bond issuance linked to artificial intelligence investments, rising term premia, and worries about the Fed’s commitment to fighting inflation have all contributed to pushing yields higher.
Interest payments on the national debt have totalled nearly $1.2 trillion so far this year, making it the largest single budget expenditure outside of Social Security and Medicare.
With the Federal Reserve remaining hesitant to move on interest rates without clearer data on inflation and the labour market, the government’s borrowing costs have continued to climb sharply.
The escalating debt burden raises serious long-term questions about fiscal sustainability, particularly as both mandatory spending and debt servicing costs consume an ever-larger share of the federal budget.