The United States’ total government debt has surpassed $40 trillion for the first time. Spending on programs including Social Security and interest payments is rising rapidly, while tax cuts mean revenue collection is falling well short by comparison. As a result, fears are growing of a major financial crisis.
According to the US Treasury Department’s latest daily statement of cash and debt balances, the government’s debt rose to $40.047 trillion as of last Tuesday. Of this, Treasury securities held by the public amounted to $32.266 trillion, and debt held by various government agencies stood at $7.782 trillion.
In under a decade, the United States’ government debt has more than doubled. When Donald Trump first took office as president in January 2017, the country’s government debt stood at $19.95 trillion.
Roughly one-third of the increase in government debt stems from emergency lending programs undertaken by the government under Trump and former President Joe Biden to cushion the blow of the Covid-19 pandemic. The remaining two-thirds is attributable to fiscal policies pursued by the two presidents and long-standing structural imbalances between taxation and spending.
Budget watchdog groups had been warning for several weeks that the debt was approaching a record level. They have cautioned that unless lawmakers take firm action now to address this dangerous situation, the country will face a major economic crisis.
Maya MacGuineas, president of the nonpartisan research organization the Committee for a Responsible Federal Budget, said $40 trillion in debt does not remain confined to the government’s books alone; its impact is felt across the entire economy, and, one way or another, it ultimately squeezes ordinary people’s pockets.
MacGuineas said the more the government borrows, the greater the pressure on inflation will grow, the more pressure will build to cut spending in other important areas of the budget, and the more vulnerable the United States will become during domestic emergencies or instability abroad.
MacGuineas further said it took a long time for US debt to reach $1 trillion for the first time, back in 1981. Yet debt reached the $40 trillion mark in less than five months after crossing $39 trillion. Over less than the past 20 years, the country’s debt has quadrupled.
Debt rose under Trump and Biden
The rise in US government debt is attributable to various policies pursued during the Trump and Biden administrations, alongside a long-standing imbalance between revenue and spending. The government’s massive spending during the coronavirus pandemic also played a major role.
During Trump’s first term, US government debt rose by $7.8 trillion. More than half of that increase came in the final nine months of his term, driven by government spending to combat the pandemic.
Since becoming president for a second time in January 2025, debt has risen by a further $3.8 trillion; combining both terms, government debt has risen by $11.6 trillion during his time in office so far.
Meanwhile, US government debt rose by $8.4 trillion during Joe Biden’s four-year term. Massive sums were also spent combating the coronavirus during his tenure. Alongside that, large amounts were spent on infrastructure development, clean energy, and other government programs.
Interest payments rising
The United States’ annual government spending totals roughly $7 trillion. Roughly 60 percent of that goes to various mandatory programs, including Social Security, healthcare for the elderly, healthcare for low-income people, and medical care for veterans.
In addition, roughly $1.1 trillion is spent each year on interest payments on government debt. This expense is rising in step with the growth in debt levels and interest rates.
In fiscal year 2025, spending on interest payments for US government debt surpassed Defense Department spending for the first time. In the first 10 months of the current 2026 fiscal year, interest payments have exceeded spending on Medicare, one of the largest healthcare programs. After Social Security, this is now the second-largest spending category in the US budget.
Budget deficit also growing
The US budget deficit stood at $432 billion this past July — one of the largest budget deficits in the country’s history.
This deficit stems from falling tariff revenue and rising spending on Social Security and healthcare for the elderly. In just the first 10 months of the current 2026 fiscal year, the US budget deficit has already surpassed the entire 2025 fiscal year’s deficit. Two months remain before the end of the current fiscal year.
The retirement and healthcare costs of the United States’ aging population are also placing additional strain on the government. In particular, as the large generation born after World War II retires, spending on programs like Social Security and Medicare is rising. But government revenue from wages and income taxes is not enough to cover these expenses.
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