US National Debt Breaches $40 Trillion Mark for First Time as Deficits Surge
Rep. Jodey Arrington, R-Texas, discusses the urgent need for fiscal reform, including spending caps and reducing government waste, during an appearance on ‘The Bottom Line.’
The U.S. national debt exceeded $40 trillion for the first time in history on Wednesday, driven by ongoing federal budget deficits that continue to push the total higher.
According to Treasury Department data released Wednesday, the gross national debt reached $40,047,425,768,420.22 as of August 18.
This $40 trillion threshold follows the debt surpassing $39 trillion approximately five months ago in March, which came shortly after the $38 trillion mark was breached in October 2025.
The rapid growth in America’s national debt stems from escalating interest costs tied to a larger debt load and rising interest rates, alongside expanding federal expenditures on programs such as Social Security and Medicare due to the aging population.
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The U.S. gross national debt surpassed $40 trillion for the first time amid surging federal spending. (Bill Clark/CQ-Roll Call, IncGetty Images)
In a March forecast, the nonpartisan Congressional Budget Office (CBO) projected that gross national debt will climb to $63 trillion by 2036, with annual budget deficits expected to widen from roughly $2.1 trillion in the current fiscal year to $3.1 trillion per year over the next decade.
The milestone of gross national debt exceeding $40 trillion builds upon another recent benchmark that highlights its scale compared to the size of the U.S. economy.
The debt held by the public—the metric economists typically use to assess a nation’s debt relative to its economic output—reached $31.27 trillion in late March, surpassing the $31.22 trillion in gross domestic product (GDP) and marking the first time in nearly 80 years that public debt exceeded the economy’s size.
Debt held by the public is anticipated to exceed the historical record of 106% of GDP set in 1946, during post-war demobilization, within the coming years, eventually reaching an estimated 120% of GDP by 2036, according to the CBO.
US NATIONAL DEBT SURPASSES SIZE OF THE ECONOMY FOR FIRST TIME SINCE WORLD WAR II
Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told FOX Business, “For the millions concerned about affordability, let’s start by asking Washington to take notice that the national debt just hit $40 trillion.” He added that the debt has doubled in less than a decade and that “we must change course.”
“The more debt we accumulate, the greater the interest burden becomes—now even exceeding national defense spending. Each additional trillion in debt contributes to higher interest rates and inflation, driving up mortgage payments, car loans, and credit card costs for all Americans,” he said.
“Meanwhile, rising debt undermines economic growth, stifling wage gains as living expenses continue to climb.”
US DEBT SET TO CRUSH WORLD WAR II RECORD AS ANNUAL DEFICITS EXPLODE TO $3T WITHIN DECADE
The CBO’s spring budget outlook noted that debt held by the public is expected to expand at a faster pace than U.S. GDP in the coming years, potentially hampering economic growth and reducing private investment, while simultaneously increasing interest obligations.
The CBO also cautioned that these trends elevate the risk of a fiscal crisis, where investor confidence in U.S. government debt erodes, possibly triggering sudden interest rate hikes and broader economic and financial instability.
Such scenarios might lead to elevated inflation expectations, which could ultimately weaken the dollar’s standing as the world’s primary reserve currency.
“The only positive aspect of our fiscal challenge is that viable solutions exist, and the budget remains fully within our control,” Peterson said, pointing out that geopolitical rivals such as China, Russia, and Iran may take advantage of any erosion of U.S. economic strength.
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“To enhance living standards—for today and future generations—we must act now to steer the nation toward a more fiscally responsible and sustainable path,” he concluded.
