Economic conditions & trends

US National Debt Tops $40 Trillion for First Time

Is this a sign of a broken system or an overhyped milestone markets have already shrugged off?

AUG 20·Updated AUG 24

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Above: An electronic display shows the national debt in Washington, DC, on Aug. 19. Image credit: Mandel Ngan/AFP/Getty Images

The Facts

The U.S. national debt surpassed $40 trillion for the first time on Tuesday, with the Treasury Department confirming the figure of $40.047 trillion on Wednesday. The milestone was reached five months after the $39 trillion mark was hit.
Debt grew faster than projected, partly due to lost revenue after the Supreme Court struck down President Donald Trump's tariffs, forcing the Treasury to increase borrowing. Total borrowing was expected to hit $39.4 trillion this fiscal year.
Interest payments on the national debt are projected to exceed $1 trillion this fiscal year, with the 30-year Treasury yield hitting its highest level in nearly two decades as investors demand greater compensation for holding U.S. bonds.
The One Big Beautiful Bill Act, signed by Trump in 2025, raised the debt ceiling by $5 trillion while also adding an estimated $4.7 trillion to projected deficits over the next decade, according to the CBO.
The Bipartisan Policy Center estimates the U.S. will reach the $41.1 trillion statutory debt limit between late winter and midsummer 2027, at which point Congress would need to raise or suspend it to avoid a potential default.
Annual interest payments on the debt now consume about 19% of federal revenue and could climb to 26% by 2036, according to the Peter G. Peterson Foundation. The Social Security trust fund is projected to be insolvent by 2032.