US national debt exceeds $40tn, govt data shows

n n

The US gross national debt has surged past $40 trillion, government data showed Wednesday, outstripping earlier forecasts at a pace fuelled in part by President Donald Trump’s invalidated tariffs.

n

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.

n

Total public debt outstanding stood at $40.05 trillion at the close of business Tuesday, according to data released by the Treasury Department on Wednesday.

n

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.

n

Rising US debt comes at a concerning moment as borrowing costs have swelled.

n

Yields on long-term Treasury bonds rose Tuesday to the highest level since 2007, reflecting growing price pressures due to war in the Middle East and anxiety over US deficit spending.

n

The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis.

n

The US Treasury Department moved to steady the long-term bond market early Wednesday, sending yields lower.

n

The federal government operates at a deficit and borrows money to cover the gap.

n

But “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.

n

“Over the last few years, the United States has moved into roughly $2 trillion deficits, even during peace and prosperity,” she added.

n

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.

n

“That has made markets more nervous,” she said.

n

AFP

n n