The US gross national debt has surged past $40 trillion for the first time, government data showed Wednesday, outstripping earlier forecasts at a pace fuelled in part by President Donald Trump’s invalidated tariffs.
Total public debt outstanding stood at $40.05 trillion at the close of business Tuesday, according to data released Wednesday by the Treasury Department.
Rising US debt comes as concerns over inflation, war in the Middle East and government spending have been driving investor worries, and the cost of borrowing has grown. The federal government operates at a deficit and borrows money to help cover its obligations, including its war spending and tax cuts. However, experts say the exploding debt and the latest record milestone are already affecting Americans’ pocketbooks by raising borrowing costs for things like mortgages and cars, lowering wages from businesses that have less money available to invest and creating more expensive goods and services.
The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis. Federal borrowing surged during the Great Recession of 2007-2009 and increased following the government’s response to the downturn triggered by Covid-19, said Caleb Quakenbush, director of fiscal policy at the Bipartisan Policy Center. Earlier reporting noted: The unprecedented $40 trillion figure highlights competing administration priorities, from boosting the defence spending that the U.S. relies on to carry out President Donald Trump’s almost-6-month-old Iran war to lowering the cost of gas and groceries.
“It’s been well known for a while that the United States government was on a pretty unsustainable path with deficits,” said Jessica Riedl, a budget and tax fellow at the Brookings Institution. Earlier reporting noted: Kush Desai, a White House spokesman, said the Trump administration “has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America’s debt-to-GDP ratio trending in the right direction. Earlier reporting noted: “The federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity,” said Margaret Spellings, president and CEO of the Bipartisan Policy Center.
