US national debt exceeds $40 trillion for first time
Washington (United States) (AFP) – 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.
The uptick in borrowing comes as longer term US obligations linked to social security and health care have been growing, while interest payments have climbed as well.
Total public debt outstanding stood at $40.05 trillion at the close of business Tuesday, according to data released Wednesday by the Treasury Department.
This stands in contrast to an earlier forecast by the Congressional Budget Office that overall borrowing would hit $39.4 trillion by the end of fiscal year 2026.
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.
Yields on long-term Treasury bonds rose Tuesday to the highest level since 2007, reflecting growing price pressures due to war on Iran and anxiety over US deficit spending.
The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis.
But the US Treasury Department moved to steady the long-term bond market early Wednesday, sending yields lower.
The federal government operates at a deficit and borrows money to help cover its obligations, including its war spending and tax cuts.
"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.
"Over the last few years, the United States has moved into roughly $2 trillion deficits, even during peace and prosperity," she added.
While deficits of three percent to four percent of GDP used to worry financial markets, she noted that levels are closer to six percent to seven percent of GDP now.
"That has made markets more nervous," she said.
As inflation pushed interest rates higher, interest costs on the debt have risen as well, and costs linked to an ageing population are pushing up deficits.
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22 replies
wait but DOGE said to cut foreign aid to the ni- I mean... non white people? Shouldn't this have put the US budget into surplus? /s
crazy how just confiscating all of elmo's assets would wipe out 2% of the national debt
Not even remotely. Elmo is this rich only on paper: if the assets were sold, their value would instantly plummet.
i'm not saying sell the assets to get money, i'm saying nationalise
His companies are so overvalued that it probably makes more sense to spin up new nationalized versions that compete his I to the ground. The government can just use his patents.
How does that help reduce the national debt?
Right now you heavily subsidize his companies and all the profits go to shareholders.
If you nationalize, you can subsidize them just the same, but the profit can be used to reduce the debt.
Realistically, you wouldn't nationalize a car maker without creating a market distortion. But SpaceX is basically NASA at a higher cost which denial is covered by people repeating "private is more efficient".
by increasing the net worth of the government without a connected expense.
It may improve debt to GDP or debt to assets, but doesn’t reduce it nominally
That doesn't help reduce the national debt. All it does is make borrowing even more a bit easier and reduce interest payments some marginal amount. In other words, it would just be a way to facilitate digging the hole even deeper.
What I meant was that if you wanted to use Elon's wealth to pay off the principal - which is what you really want to do - then you'd find out his wealth would largely go puff the minute you convert any significant amount of it into real money.
i dont really care if it helps the us, i just want him skint
Yeah sure. I mean, don't we all...
But expropriating Elon isn't going to do jack squat to the national debt, is all I said.
I keep seeing that written here and there. I say: there's only one way to know for sure!!
But the Dow!? The Dow is up 50 thousand!!
Reuters headline blamed it on Biden and Trump. Really interesting way to look at it. Yeah Biden's terrible anti-inflationary, pro-stability policies, his resetting the economy and getting us back on track after Trump 1.0 brought the world to an unprecedented halt, that was definitely the problem here. Let's split the blame equally.
I'll just leave this here...
Some say the orang is the best at borrowing money.
This will end well for everyone
You don't say! US could afford whatever debt in the past decades because world trade is in USD only and countries worldwide would keep the USD value high.
But Trump actively promoted the use of other currencies by being a massive idiot bully. When the USD has less weight in everyone else's reserves, it will start declining in value, and maintaining the current level of deficit could send it in free fall.
Every day i think about cashing in the bonds i was given when i graduated early.