US national debt surpasses record $40 trillion
The US national debt has surpassed $40 trillion for the first time, raising concerns about a fiscal crisis as government spending outpaces revenue. The debt has doubled since 2017, with a significant increase during the COVID-19 pandemic and big-ticket outlays for infrast…
Intelligence analysis by Llama
The US national debt has reached a record $40 trillion, with a significant increase during the COVID-19 pandemic and big-ticket outlays for infrastructure investment and clean energy subsidies. This raises concerns about a fiscal crisis as government spending outpaces revenue.
Imagine the US has a huge credit card bill that's getting bigger and bigger. The country is spending more money than it's taking in, and that's making it harder for people to afford things like housing and food. It's like a big financial problem that needs to be fixed.
Analysis
The Growing Concern of US National Debt
The US national debt has surpassed $40 trillion for the first time, raising concerns about a fiscal crisis as government spending outpaces revenue. The debt has doubled since 2017, with a significant increase during the COVID-19 pandemic and big-ticket outlays for infrastructure investment and clean energy subsidies.
According to Treasury Department data, the debt stood at $19.95 trillion in January 2017, when President Donald Trump was sworn in for the first time. Since then, the debt has increased by $20.05 trillion, with a significant portion of that increase occurring during the two years following the outbreak of COVID-19.
The government, both under Trump and his successor, President Joe Biden, borrowed heavily for the pandemic response. Since Trump took office a second time in January 2025, the US debt load has increased by $3.8 trillion – contributing to a total debt growth of $11.6 trillion across his two terms so far. It increased by $8.4 trillion during Biden’s term, on the back of not only pandemic recovery spending but also big-ticket outlays for infrastructure investment, clean energy subsidies and other priorities championed by his Democratic Party.
Margaret Spellings, CEO of the Bipartisan Policy Center, a centrist think tank, said last week as the $40 trillion threshold neared, "Our federal programmes spend much more than the government takes in, and the biggest-ticket items in the federal budget are all running on autopilot." "Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity," she added.
The $40 trillion figure amounts to about $117,000 in debt per person in the US, and $297,000 per household. It is approximately the combined value of the economies of China, Germany, Japan, the United Kingdom and India, according to the Peter G Peterson Foundation, a think tank based in Washington, DC.
The US Treasury last week reported the fourth-highest monthly deficit in US history – $432bn for July – as the Trump administration refunded tariffs that were struck down by the court system. Those refunds turned customs receipts negative for the third month in a row, and outlays for Social Security and Medicare benefits for seniors continued to grow.
The deficit for the first 10 months of fiscal 2026 has already exceeded the total gap for all of fiscal 2025, with two months to go in the current fiscal year.
Key points
- The US national debt has surpassed $40 trillion for the first time.
- The debt has doubled since 2017, with a significant increase during the COVID-19 pandemic.
- The government has borrowed heavily for the pandemic response and big-ticket outlays for infrastructure investment and clean energy subsidies.
- The national debt amounts to about $117,000 in debt per person in the US, and $297,000 per household.
- The US Treasury reported the fourth-highest monthly deficit in US history – $432bn for July.
If the US government can find a way to reduce its spending and increase its revenue, it could help to stabilize the national debt and prevent a fiscal crisis. This could involve implementing tax reforms, reducing military spending, and investing in programs that promote economic growth.
If the US national debt continues to grow unchecked, it could lead to a fiscal crisis that threatens the country's economy and long-term prosperity. This could result in higher interest rates, reduced government services, and a decrease in the standard of living for Americans.
