The US Treasury Department reported on Wednesday that total public debt outstanding had surpassed $40 trillion for the first time, reaching $40.05 trillion at the close of business on Tuesday. The figure is the highest in US history.
The milestone arrived just five months after the debt hit $39 trillion in March. It had crossed $38 trillion in October, and passed $30 trillion as recently as January 2022. Total debt has risen by roughly a third in under five years and has more than doubled over the past decade.
Defense costs, social programs such as Social Security and Medicare, and interest payments now account for an enormous share of federal spending. The growth spanned successive administrations under both Donald Trump and Joe Biden, as the annual budget deficit doubled over ten years.
The increase reflects competing spending priorities within the current administration, from defense outlays tied to the nearly six-month-old US military campaign against Iran to efforts to lower consumer prices for fuel and groceries.
Kush Desai, a White House spokesman, said the 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.”
Economists warn the rising debt is already affecting household finances by pushing up borrowing costs for mortgages and car loans, restraining wages, and raising the price of goods and services. Higher interest payments, they say, will crowd out other public investment over time.
The mounting federal burden comes alongside record borrowing by American consumers, with credit card balances approaching new highs near $1.26 trillion. Advocates for a balanced budget argue the combined trend leaves the country with harder fiscal choices ahead.
“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 chief executive of the Bipartisan Policy Center. “Our current fiscal trajectory is plainly unsustainable.”
Republicans have long opposed tax increases, while both parties have resisted cuts to major entitlement programs, leaving little consensus on narrowing the deficit. Analysts have raised the prospect of a “doom loop,” in which rising debt drives higher interest costs that in turn require further borrowing.
Treasury will publish its next monthly budget statement in the coming weeks, offering an updated picture of the deficit’s trajectory.