ISLAMABAD: US government debt has crossed $40 trillion for the first time, marking a historic borrowing milestone and renewing concerns over the sustainability of the world’s largest economy’s finances.
Treasury Department data showed total public debt outstanding reached $40.047 trillion on Wednesday, comprising $32.266 trillion in debt held by the public and $7.782 trillion in intragovernmental holdings.
The debt has more than doubled from $19.95 trillion in January 2017, when Donald Trump began his first term as president.
The increase has occurred across Trump’s administrations and Joe Biden’s four-year presidency, with borrowing accelerating sharply during the Covid-19 pandemic.
The debt increased by about $11.6 trillion during Trump’s two terms in office, including his current term, and by roughly $8.4 trillion during Biden’s presidency, according the data analysis.
Trump’s first term alone saw debt rise by about $7.8 trillion, with more than half of that increase accumulating during the pandemic response.
US running large dubet deficit
The latest milestone comes as the Trump administration continues to run large budget deficits. Rising spending on Social Security and Medicare, higher defence costs and growing interest payments are putting additional pressure on federal finances.
At the same time, tax cuts have constrained government revenues, widening the gap that must be financed through borrowing.
Interest payments have emerged as one of the largest federal expenditures as both the size of the debt and borrowing costs have increased.
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Higher Treasury yields also raise the government’s cost of refinancing existing debt and financing new deficits.
The pace of borrowing has accelerated in 2026. The government has already added about $1.8 trillion to its debt during the fiscal year, according to figures cited by fiscal watchdogs.
The faster accumulation has also brought the next debt-ceiling confrontation closer, with the current $41.1 trillion limit potentially being reached earlier than previously expected.
The $40 trillion milestone does not by itself mean the United States is facing an immediate default or economic crisis.
The sustainability of government debt also depends on economic growth, interest rates, tax revenues and investors’ willingness to continue buying Treasury securities. The combination of persistent deficits, rising interest costs and spending on major entitlement programmes is making the debt burden difficult to manage.
The challenge is becoming more significant as the government must devote a growing share of its revenues to servicing debt accumulated over previous decades.
The United States remains the world’s largest sovereign borrower, and Treasury securities form the foundation of global financial markets.
Any sustained deterioration in confidence over American fiscal policy could therefore have consequences far beyond the United States of America, affecting global bond yields, borrowing costs, exchange rates and financial markets.
