The United States’ debt surpassed a record $40 trillion Wednesday, as defense costs, social programs, and interest on the deficit make up an enormous share of federal spending with no sign of receding, essentially outstripping revenue by more than $2 trillion a year.
The new figures were reported by the Treasury Department in its daily financial update.
The government is spending more than a trillion dollars a year just to pay interest on the mounting debt. Interest is now the government’s second biggest expense. Interest costs in the first 10 months of this fiscal year were 15% higher than they were in the same period a year ago. That reflects not only the growing debt but also the higher interest rates that investors are now demanding to keep lending the government money.
The deficit widened further after the Sufurther after the Supreme Court struck down many of President Trump’s tariffs, forcing the Treasury to refund more than $100 billion in import taxes that were collected illegally as the administration attempts to blame the balloning deficit on Democrats.
During Trump’s first term, public debt rose by $7.8 trillion. Since his return to office in January 2025, debt has grown by $3.8 trillion, amounting to a total of $11.6 trillion across his two terms so far.
Total debt, which includes debt owed to others and what the government owes itself, has doubled since January 2017, when Trump began his first term as president. US debt at the time was $19.95 trillion.
The CBO estimates that debt will rise from 101 percent of gross domestic product (GDP) in 2026 to 120 percent in 2036. That is well above the previous US record of 106 percent after World War II.
Internationally, the US is in debt to several countries and private investors. In 1970, total foreign debt holders accounted for 5% of gross debt, but by 2025, they made up 32%.
Analysts say the rising debt could potentially create an economic crisis for the US, in the form of hyperinflation or higher interest rates if it goes unchecked.
Independent groups like the Bipartisan Policy Center note that the current pace of accumulation remains unsustainable.
Bipartisan Policy Center (BPC) President and CEO Margaret Spellings released a statement after the total federal debt hit $40 trillion saying, “This bleak milestone serves as yet another reminder that it’s past time to confront a fundamental mismatch. Our federal programs spend much more than the government takes in, and the biggest- ticket items in the federal budget are all running on autopilot. Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity.
“Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario. Even in the rosiest scenarios, we’re speeding toward a cliff and refusing to turn the wheel. “