US National Debt Passes $40tn After Doubling in a Decade – BBC News
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US national debt has more than doubled in a decade to reach a milestone $40tn (£29.4tn), Treasury figures show.
The rise reflects years of heavy spending under both the Trump and Biden administrations, along with higher interest payments that have steadily added to the total. In 2016, the national debt stood at just under $20tn.
The Congressional Budget Office (CBO) had projected overall borrowing would reach
$39.6tn by the end of fiscal year 2026, external.
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 said the US is nearing its $41.1tn debt ceiling, with debt projected to climb to about $64tn by 2036.
As the federal government spends more to cover its budget deficits, consumers have faced higher interest rates and inflation.
The $40.05tn (as of 18 August), external covers all outstanding Treasury bonds, bills and notes, and underscores the scale of US borrowing under two presidents.
The interest rate on 30-year bonds, which are a type of debt used to raise funds from investors,
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 – affecting 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 about 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.
While ordinary people are unlikely to be affected immediately, difficulties in managing the debt could eventually trigger disruptions on a scale similar to the 2008 financial crisis, economics professor David Jacks.
The pace of America’s growing debt is accelerating "and at some point, the bills will come due," said Jacks from the National University of Singapore.
The Treasury Department announced on Wednesday that it would increase its buyback operations by "at least double" from $2bn to $4bn and will be effective from 9 September to 4 November.
It said the intervention reflected its "desire to provide greater liquidity support" for longer-term bonds.
The rate on borrowing costs over 30 years eased on the back of the move to 5.18%.
John Canavan, lead analyst at Oxford Economics, said the decision to increase purchases appeared to be an "attempt to provide relief" on long-term borrowing costs, which had been under "significant pressure from rising oil prices, inflation risks, and heavy supply due to global sovereign and corporate borrowing needs."
But he said given the size of outstanding Treasury debt, the increase in buybacks from the government was "unlikely to provide meaningful long-term relief."
Rene Albrecht, senior analyst at DZ Bank in Germany, said the US government feared the "pain of 5% or higher yields" over the long term not just because it raised borrowing costs for the government, but also the private sector.
"It’s only three months until the midterm elections," Albrecht said.
