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The U.S.’s national debt more than doubled over the last decade, now sitting above $40 trillion. And it’s been growing at an increasingly rapid pace — it hit $38 trillion last October, $39 trillion by March, and now, another five months later, $40.047 trillion.
The government continues to spend more than it takes in, with defense costs, Social Security, Medicare and interest on the debt all consuming large shares of federal spending. That interest alone now costs the government more than $1 trillion a year.
A growing gap
The debt has more than doubled since the start of President Donald Trump’s first term, from just under $20 trillion in 2016 to more than $40 trillion today. And the government is still adding to it.
Just last week, the Treasury Department reported a $432 billion deficit for July, the fourth-largest monthly shortfall U.S. history. Court-ordered refunds of Trump’s “Liberation Day” tariffs helped push customs revenue into negative territory for a third straight month.
And Congress could soon be dealing with the next debt-limit fight.
The current ceiling is $41.1 trillion. The Bipartisan Policy Center estimates the U.S. could reach that figure sometime between late winter and mid-summer of next year, forcing Congress to once again decide whether to raise or suspend the limit.
How does a $40 trillion national debt actually reach your wallet?
Michael Peterson, chairman and CEO of the Peter G. Peterson Foundation, said the government’s deficit costs Americans.
“When you borrow that much money, it helps fuel greater inflation,” he said.
Peterson believes the government will need to refinance about $13 trillion in Treasuries over the next year, including about $2 trillion in new borrowing to fund the deficit.
“So, that’s about $2 trillion of new borrowing to fund the deficit and $11 trillion of refinancing,” he explained. “That’s a lot of debt in the market and a lot of capital that it’s taking up. That increases interest rates. So, you’re seeing Treasury rates much higher than they were recently. When Treasury rates go up, all the other rates also follow. So, your mortgage rate goes up, your car loan goes up, your credit card bills go up.”
He said lawmakers could reduce the deficit gradually through a combination of tax and spending changes without immediately balancing the federal budget.
Round out your reading
- All your questions about napping, answered.
- Trump’s $5,000 promise echoes past payouts that never materialized.
- Inside the effort to make data centers pay their share of electricity costs.
- Why did the Feds seize the ’largest Martian meteorite on Earth’?
- Photos and video show exactly where and when Trump visited Ground Zero after 9/11.
