Total US national public debt has surpassed $40 trillion for the first time — and has now risen by a third in less than five years — Bloomberg News reported.
US public debt outstanding stood at $40.05 trillion as of the close of business Tuesday, a US Treasury Department release showed.
The news came after US Treasury Secretary Scott Bessent made a fresh attempt to control long-term borrowing costs, a huge part of the growth in debt.
The US Treasury said it is increasing a buyback programme for longer-dated securities, a move that sent yields lower.
“For perspective, it took nearly 200 years for America’s gross debt to reach $1 trillion for the first time in 1981,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
“$40 trillion of debt doesn’t exist solely on the government’s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another.
“The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad.”
Matthew Luzzetti, chief US economist at Deutsche Bank, said: “Optically, I’m sure crossing thresholds like $40 trillion will focus attention on the issue in the near term.
“But it does not represent a magical threshold for debt dynamics, and projections have anticipated this outcome for some time.”
Luzzetti said more important is the rise in US Treasury yields, which is steadily increasing the cost of servicing the record debt load.
The US Treasury’s latest 30-year bond auction resulted in the most expensive such sale in a quarter century. A 10-year auction a day earlier drew the highest financing cost for those securities since 2007.
As lenders demand higher yields, that increases the Treasury’s borrowing needs.
With two months left to go in the fiscal year, the US government’s bill for interest costs alone so far in 2026 is $1.17 trillion — a 15% increase on the same period in the prior year. That adds to the debt, potentially causing lenders to demand higher interest rates, in a pattern known as a “doom loop.”
Interest costs alone are now the third-largest part of the US budget, after healthcare and Social Security.
“The federal budget is the enemy within,” Douglas Holtz-Eakin, president of the American Action Forum ,wrote. “It is the greatest threat to the foundations of economic progress, U.S. international economic standing, and national security. The only reason for optimism should be material actions to rein in the sea of red ink. There are no such material actions.”
The US government is now getting closer to the statutory debt ceiling of $41.1 trillion. Fitch Ratings estimates the ceiling will be reached in mid-2027.