US national debt surpasses $40 trillion

The total US national debt surpassed $40 trillion this week, after adding $1 trillion in new debt to government balance sheets in just a few months.

The latest data from the US Treasury shows that, as of Aug. 18, the US government’s “Total Public Debt Outstanding” is now at $40.047426 trillion and comes on the heels of new projections that the annual US deficit is projected to reach $2.1 trillion when the government’s fiscal year ends on Sept. 30.

The national debt has now more than doubled in less ‌than a decade during the presidencies of Donald Trump and Joe Biden. It has quadrupled in less than 20 years.

It’s the latest grim milestone in the US fiscal picture after the debt held by the public surpassed the size of the entire US economy this spring. The US is firmly on pace to break the all-time record debt-to-GDP ratio set in 1946 after World War II.

“It took 192 years to reach our first $1 trillion, but only five months to go from $39 trillion to $40 trillion,” Margaret Spellings of the Bipartisan Policy Center said.

The new Treasury data released on Wednesday also shows the government debt held by the public — a more conservative measure that removes what is known as intragovernmental holdings, or money the government owes itself — at a slightly lower but still historically high level of $32.265799 trillion.

Maya MacGuineas, president of the budget watchdogs at the Committee for a Responsible Federal Budget, foresaw this latest milestone in a statement earlier this month, noting that government overspending in July alone had set a pace of $14 billion in new debt every single day.

“We are already feeling the consequences of this extreme borrowing — high interest rates, trillion-dollar interest payments, and looming trust fund insolvency that threatens benefits for Social Security and Medicare,” MacGuineas wrote as she called for lawmakers to try to find a way to reduce deficits to 3% of GDP. (That figure currently stands at 5.8%.)

The Congressional Budget Office projects that without major policy changes, the ratio of federal debt held by the public to GDP will rise further to 120% in 2036 and to 175% by 2056.

Read more: How the soaring federal debt affects you personally

The drivers of the debt

A recent report from the Congressional Budget Office outlined how the exploding debt and deficit aren’t likely to reverse anytime soon, finding that government receipts grew 3% last year — failing to keep pace with spending that is up by 5%.

A core driver of the surging debt, the CBO noted, is increased spending on programs like Social Security and Medicare as the population ages, as well as interest payments on the debt itself.