The US national debt has exceeded $40 trillion, having doubled in a decade, marking a significant economic milestone. This increase reflects years of heavy spending under both the Donald Trump and Joe Biden administrations, as well as higher interest payments that have steadily added to the total, according to the BBC. In 2016, the national debt stood at just under $20 trillion.

Debt Projections and Rising Concerns

The Congressional Budget Office (CBO) had projected overall borrowing would reach $39.6 trillion only by the end of fiscal year 2026. The faster-than-expected rise has sharpened concerns about how quickly the government’s borrowing needs are growing, and what that means for future interest costs. The CBO says the US is nearing its $41.1 trillion debt ceiling, with debt projected to climb to about $64 trillion by 2036.

During his first term, Trump approved $8.4 trillion worth of debt, with a huge chunk going to Covid-19 relief spending, while Biden approved $4.3 trillion worth of debt, according to the Committee for a Responsible Federal Budget, as reported by The Guardian. In fiscal year 2026, $1.8 trillion has been added to the debt so far, with a big chunk of new government spending dedicated to tariff refunds, which have totaled $100 billion, according to the Bipartisan Policy Center.

Economic Impacts and Rising Interest Rates

As the federal government spends more money to cover its budget deficits, consumers have faced higher interest rates and inflation. The $40.05 trillion sum, as of 18 August, covers all outstanding Treasury bonds, bills, and notes, according to the BBC. The move came after the interest rate on 30-year bonds hit 5.34% on Tuesday—the highest level in almost 20 years.

Those rates, known as yields, influence how much the US government, companies, and consumers pay to borrow—impacting mortgages, car loans, and credit cards. The recent surge in bond yields has been driven by rising oil prices linked to the US-Iran war, with investors worried over inflation. There are also concerns over government debt and the huge amounts of cash being borrowed by tech firms to develop Artificial Intelligence (AI), with the timeline and level of returns on investment uncertain.

Debt as a Growing Concern for Future Generations

Government spending watchdog groups have anticipated for weeks the US surpassing the $40 trillion threshold after debt reached $39 trillion in March, as reported by The Guardian. ‘For perspective, it took nearly 200 years for America’s gross debt to reach $1 trillion for the first time in 1981,’ said Maya MacGuineas, president of the Committee for a Responsible Federal Budget in a statement. ‘$40 trillion of debt doesn’t exist solely on the government’s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another. The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad.’

The threshold was breached as Congress, currently out of session, remains at an impasse over its latest spending bill. The US House and Senate passed two different bills that would fund the federal government, which is scheduled to shut down on 30 September if a bill isn’t adopted by both chambers and signed by the president. Earlier on Wednesday, the US treasury announced it would double its buyback of government debt after the bond market balked at ongoing inflation and continued conflict between the US and Iran.

The Treasury Department said its intervention reflected its ‘desire to provide greater liquidity support’ for longer-term bonds.