US national debt hits record $40 trillion milestone
Photo: REUTERS
US national debt has crossed the historic $40 trillion threshold for the first time. This massive burden has triggered severe warnings of an impending fiscal crisis, as government expenditures continuously outrun federal revenues.
According to data that the Treasury Department released on Wednesday, the country’s total debt has doubled since January 2017, when President Donald Trump took his first oath of office. At that time, the national debt stood at $19.95 trillion.
Around one-third of this colossal increase accumulated during the two years following the outbreak of the COVID-19 pandemic, which officially began in March 2020. During this crisis, both Trump and president Joe Biden borrowed aggressively to fund pandemic relief measures.
Since Trump assumed his second presidency in January 2025, the national debt has jumped by $3.8 trillion. This brings his combined debt accumulation across both of his presidential terms to a staggering $11.6 trillion.
Meanwhile, the national debt climbed by $8.4 trillion during Biden’s single term. Biden’s administration drove this growth through massive recovery programs, substantial infrastructure investments, clean energy subsidies, and other core legislative priorities of the Democratic Party.
Sounding the alarm on this rapid fiscal expansion, Margaret Spellings, chief executive officer of the centrist think tank Bipartisan Policy Center, said last week as the debt neared the $40 trillion mark, “Our federal programmes spend much more than the government takes in, and the biggest-ticket items in the federal budget are all running on autopilot.”
Spellings warned, “Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity.”
This monumental $40 trillion figure translates to an average debt of around $117,000 for every individual in the US or a staggering $297,000 for every American household.
To put this into perspective, the Peter G Peterson Foundation, a Washington, DC-based think tank, noted that this debt pile roughly equals the combined gross domestic products of China, Germany, Japan, the United Kingdom, and India.
In a stark demonstration of this spending imbalance, the US Treasury reported a $432 billion deficit for July - the fourth-largest monthly deficit in the history of the nation. This gap widened significantly as the Trump administration refunded billions of dollars in tariffs that the court system had struck down.
These massive refunds pushed federal customs receipts into negative territory for the third consecutive month. At the same time, federal outlays for Social Security and Medicare benefits for senior citizens continued to escalate.
With two months still remaining in the current fiscal year, the federal budget deficit for the first ten months of fiscal year 2026 has already surpassed the entire deficit recorded in fiscal year 2025.
Despite warnings, Trump has largely brushed aside the dwindling group of fiscal hawks within his own Republican Party, choosing instead to champion aggressive spending throughout both of his presidential terms.
In fact, the nonpartisan Committee for a Responsible Federal Budget estimates that the policy decisions of both Trump and Biden pushed the national debt trajectory far higher than what would have accumulated under the spending laws in place when they took office.
For example, the Congressional Budget Office (CBO), which serves as the nonpartisan bookkeeper for federal lawmakers, projects that Trump’s signature second-term legislative package, the One Big Beautiful Bill Act, will add an additional $4.7 trillion to the national debt.
Although Trump centered his second presidential campaign on aggressive cost-cutting, tasking the non-governmental Department of Government Efficiency (DOGE) to slash the federal workforce, his spending cuts have largely targeted discretionary programs, which represent the smallest slice of the federal budget.
US spends around $7 trillion annually. However, the government earmarks roughly 60 percent of this massive budget for mandatory programs, such as Social Security, Medicare, Medicaid, and veterans’ benefits, which naturally expand to keep pace with rising living costs.
Moreover, the government spends $1.1 trillion just to service the interest on its accumulated borrowing. This interest burden continues to grow as the total debt climbs and interest rates rise.
Strikingly, the 2025 fiscal year budget marked the first time in history that the cost of serving national debt surpassed total Pentagon funding.
During the first ten months of the current fiscal year, rising interest payments surpassed Medicare healthcare outlays. This shift made interest payments the second-largest line item in the entire federal budget, trailing only the Social Security pension system.
As the government faces rising costs to fund the retirement and healthcare of the aging baby boom generation, the trust funds supporting Social Security and Medicare face growing strain.
This crisis deepens as federal payroll and income tax revenues continue to fall short of covering these escalating federal obligations.
Source: Al Jazeera (adapted)
