The United States’ gross national debt has risen above $40 trillion, according to data released by the US Treasury Department.
Total public debt outstanding reached $40.05 trillion at the close of business on Tuesday, exceeding the Congressional Budget Office’s earlier projection of $39.4 trillion for the end of fiscal year 2026.
The rise in borrowing has been driven partly by growing long-term obligations for social security and healthcare, as well as increasing interest payments.
The development comes amid rising borrowing costs, with yields on long-term US Treasury bonds reaching their highest level since 2007 on Tuesday. The increase has been linked to inflationary pressures arising from the war in the Middle East and concerns over the country’s widening budget deficit.
The higher debt levels mean the US government will have to refinance its obligations at borrowing costs not seen since before the 2008 global financial crisis.
The US federal government operates with a budget deficit and borrows to bridge the gap between its revenue and expenditure.
Jessica Riedl, a budget and tax fellow at the Brookings Institution, said the US had been on an “unsustainable path” with its deficits for some time.
She noted that the country had recorded deficits of about $2 trillion annually in recent years, including during periods of peace and economic prosperity.
According to her, deficits that previously stood at three to four per cent of GDP and worried financial markets have now risen to about six to seven per cent, increasing market concerns.
The US Treasury moved on Wednesday to stabilise the long-term bond market, resulting in lower yields.