The total national debt of United States has passed record $40 trillion mark for the first time, raising concerns that the country is facing a fiscal crisis as government spending continues to outpace revenue.
According to US Treasury Department data shared on Wednesday, the national debt stood at $19.95 trillion in January 2017, when Donald Trump was first sworn in as president, meaning the debt has doubled over the last decade across his two terms and the administration of Joe Biden.
About one-third of this massive increase occurred during the two years following the outbreak of COVID-19, which was declared a pandemic in March 2020.
During this period, the federal government borrowed heavily under both Trump and his successor, president Joe Biden, to fund the pandemic response, reports Al Jazeera.
The mounting federal debt is already raising the cost of living, choking out other public spending and investment, and threatening the long-term prosperity of American economy. This $40 trillion debt burden represents approximately $117,000 per person in US, or $297,000 per household.
According to Washington-based think tank, Peter G Peterson Foundation, this total is roughly equivalent to the combined value of the economies of China, Germany, Japan, United Kingdom, and India.
Last week, US Treasury reported the fourth-highest monthly deficit in US history, $432 billion for July, as Trump administration refunded tariffs that had been struck down by the courts.
These substantial refunds turned customs receipts negative for the third consecutive month, while outlays for Social Security and Medicare benefits for seniors continued to grow.
With only two months remaining in the current fiscal year, the deficit for the first 10 months of fiscal 2026 has already exceeded the total gap for the entirety of fiscal 2025. Despite the warnings of fiscal hawks within his Republican Party, Trump has largely ignored them, championing prolific spending across his two terms.
The nonpartisan Committee for a Responsible Federal Budget estimates that the policy choices of both Trump and Biden have increased the federal debt trajectory beyond what would have accumulated under the existing spending statutes in place when each took office.
The US currently spends approximately $7 trillion annually, with 60 per cent of that budget earmarked for “mandatory” programmes, including Social Security, Medicare, Medicaid, and veterans’ care, which generally grow to keep pace with living costs.
An additional $1.1 trillion is spent to pay the interest on US borrowing, a cost that escalates as the debt pile grows and interest rates climb. Crucially, the 2025 fiscal-year budget marked the first time debt service costs exceeded Pentagon funding.
In first 10 months of current fiscal year, interest costs have eclipsed Medicare healthcare outlays to become the second-largest line item in the federal budget, behind only the Social Security pension system.
This fiscal strain comes as US spends more to fund the retirement and healthcare costs of the ageing “baby boom” generation.
This puts immense pressure on the trust funds backing Social Security and Medicare, even as payroll and income tax revenues fall short of covering federal costs.
