US National Debt Passes $40tn in a Decade.
US national debt has more than doubled in a decade, reaching a milestone $40tn (£29.4tn), Treasury figures show. The rise reflects years of heavy spending under both the Trump and Biden administrations, along with higher interest payments that have steadily added to the total. In 2016, the national debt stood at just under $20tn.
The Congressional Budget Office (CBO) had projected overall borrowing would reach $39.6tn by the end of fiscal year 2026.
The faster-than-expected rise has sharpened concerns about how quickly the government’s borrowing needs are growing and what that means for future interest costs.
The CBO said the US is nearing its $41.1tn debt ceiling, with debt projected to climb to about $64tn by 2036.
The BBC news service is reporting that as the federal government spends more to cover its budget deficits, consumers have faced higher interest rates and inflation. The $40.05tn, as of 18 August, covers all outstanding Treasury bonds, bills and notes, and underscores the scale of US borrowing under two presidents.
The interest rate on 30-year bonds, which are a type of debt used to raise funds from investors, hit 5.34% on Tuesday – the highest level in almost 20 years. Those rates, known as yields, influence how much the US government, companies, and consumers pay to borrow – affecting mortgages, car loans, and credit cards.
The recent surge in bond yields has been driven by rising oil prices linked to the US-Iran war, with investors worried about inflation.
Concerns also remain about government debt and the large amounts of cash tech firms are borrowing to develop artificial intelligence (AI), with the timeline and return on investment uncertain.
While ordinary people are unlikely to be affected immediately, difficulties in managing the debt could eventually trigger disruptions on a scale similar to the 2008 financial crisis, according to economics professor David Jacks.
The pace of America’s growing debt is accelerating, “and at some point, the bills will come due,” said Jacks from the National University of Singapore.
The Treasury Department announced on Wednesday that it would increase its buyback operations by “at least double,” from $2bn to $4bn, effective from 9 September to 4 November.