WASHINGTON
\nTotal US debt has topped $40 trillion for the first time, the Treasury Department said on Wednesday, drawing fresh warnings that a fiscal crisis is brewing as ballooning costs for social safety-net programmes and interest payments far outstrip revenues held back by tax cuts.
\nThe Treasury\u2019s latest daily cash and debt balances statement showed total public debt outstanding at $40.047 trillion on Tuesday, a total that includes Treasury securities held by the public of $32.266 trillion and intra-governmental debt holdings of $7.782 trillion. The federal government\u2019s IOU has now more than doubled in less than a decade, from $19.95 trillion when President Donald Trump was sworn in for the first time in January 2017.
\nRoughly one-third of that increase occurred during two years of frantic government borrowing to fund the COVID-19 pandemic responses undertaken by Trump and former President Joe Biden, while the fiscal policy choices of both presidents combined with long-running tax-and-spending imbalances account for the rest.
\nBudget watchdog groups have anticipated crossing the threshold for weeks and issued stark warnings that a full-blown debt crisis could erupt unless lawmakers confront an unsustainable fiscal outlook and raise taxes, cut spending or both. \u201cForty trillion dollars of debt doesn\u2019t exist solely on the government\u2019s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another,\u201d said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget.
\n\u201cThe more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad,\u201d MacGuineas said in a statement just after the Treasury data was released.
\nShe said the $40 trillion figure was reached less than five months after debt reached $39 trillion, and has quadrupled in less than 20 years after taking until 1981 to reach $1 trillion for the first time. \u201cIt is staggering how predictable the fiscal decline of a global power can become,\u201d MacGuineas added.
\nGlobal US creditors may already be growing wary, with demand from foreign investors holding nearly one third of Treasuries declining over the past year. Days after a $25-billion auction of 30-year Treasury bonds went off at the highest yield since 2021, yields on so-called long bonds on Tuesday hit their highest levels in nearly two decades as investors demanded greater compensation in the face of hefty US government bond issuance. Yields move inversely to bond prices.
\nOn Wednesday, US Treasury Secretary Scott Bessent took a bold step to push long bond yields back down, announcing a doubling of buyback sizes for 10- to 30-year Treasuries to at least $4 billion per operation. Higher Treasury yields at the longer end tend to push up interest rates for mortgages, car and commercial loans. With the mountain of debt showing no signs of abating, Trump on Wednesday repeated his frequent demand for lower rates.
\nAsked at the White House whether Americans should worry about bond market volatility, Trump said: \u201cI don\u2019t think so at all. I think we have a very powerful country, and we\u2019re powering through these ridiculous interest rates \u2014 they\u2019re ridiculous. Look, when our country is strong, interest rates should go down.\u201d
\nThe Treasury last week reported the fourth-highest monthly deficit in US history \u2014 $432 billion for July \u2014 as tariff refunds turned customs receipts negative for the third month in a row and outlays for Social Security and Medicare benefits for seniors continued to grow. The deficit for the first 10 months of fiscal 2026 has already exceeded the total gap for all of fiscal 2025 with two months to go in the current fiscal year.
\nTrump has largely ignored the dwindling number of fiscal hawks in his Republican Party, championing heavy spending across his two terms. Public debt rose by $7.8 trillion during Trump\u2019s first term, with more than half of it accumulating during the pandemic response over his last nine months in office.
\nSince Trump took office a second time in January 2025, the US debt load has increased by $3.8 trillion, for total growth of $11.6 trillion across his two terms so far. Public debt increased by $8.4 trillion during Biden\u2019s term, also marked by heavy COVID-19 recovery spending, but driven as well by big-ticket outlays for infrastructure investment, clean energy subsidies and other priorities championed by his Democratic Party.<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON Total US debt has topped $40 trillion for the first time, the Treasury Department said on Wednesday, drawing fresh warnings that a fiscal crisis is brewing as ballooning costs for social safety-net programmes and interest payments far outstrip revenues held back by tax cuts. The Treasury\u2019s latest daily cash and debt balances statement showed […]<\/p>\n","protected":false},"author":2,"featured_media":563097,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-563075","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world"],"yoast_head":"\n