The US gross national debt has surged past US$40 trillion, government data showed Wednesday, outstripping earlier forecasts at a pace fuelled in part by president Donald Trump’s invalidated tariffs.
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.
Total public debt outstanding stood at US$40.05 trillion at the close of business Tuesday, according to data released by the treasury department on Wednesday.
This stands in contrast to an earlier forecast by the Congressional Budget Office that overall borrowing would hit US$39.4 trillion by the end of fiscal year 2026.
Rising US debt comes at a concerning moment as borrowing costs have swelled.
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.
The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis.
The US treasury department moved to steady the long-term bond market early Wednesday, sending yields lower.
The federal government operates at a deficit and borrows money to cover the gap.
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.
“Over the last few years, the United States has moved into roughly US$2 trillion deficits, even during peace and prosperity,” she added.
While deficits of 3 to 4 percent of GDP used to worry financial markets, she noted that levels are closer to 6 to 7 percent of GDP now.
“That has made markets more nervous,” she said.
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