US National Debt Tops $40 Trillion: How It Happens

August 20, 2026 | 05:38 pm

TEMPO.CO, Jakarta - The United States (US) national debt has surpassed US$40 trillion for the first time in history, according to data released by the US Treasury Department on Wednesday, August 19.

The data shows that debt held by the public and intergovernmental holdings reached US$32.266 trillion and US$7.782 trillion, respectively, bringing the total outstanding government debt to US$40.047 trillion as of Tuesday.

This new milestone, which occurred several months earlier than expected, reflects the US federal government's persistent budget deficit, as spending continues to exceed revenue, adding to the national debt.

The US federal government has spent trillions of dollars on COVID-19 pandemic response and subsequently implemented tax cuts and increased military spending. As a result, the US federal debt has grown rapidly in recent years, raising concerns in the bond market and pushing up government bond yields. Rising interest payments have further increased the total national debt.

The monthly report from the US Treasury Department shows that the federal government recorded a fiscal deficit of $1.367 trillion in the first nine months of fiscal year 2026, which began on October 1, 2025. During that period, net interest payments reached $827 billion, exceeding defense spending of $713 billion and second only to Social Security spending, which totaled $1.244 trillion.

The US federal debt surpassed $30 trillion in January 2022, surpassed $39 trillion in March 2026, and reached $39.7 trillion in July 2026.

Local media described the national debt's surpassing $40 trillion as a worrying milestone for an economy resting on increasingly shaky fiscal foundations.

Warning signs are emerging, "with debt held by the public recently exceeding the size of our economy, the deficit-to-GDP ratio running twice as high as where it should be, and interest costs exceeding our national defense budget," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement Wednesday.

"Forty trillion dollars of debt doesn't exist solely on the government's ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another," MacGuineas said.

"Our current fiscal trajectory is plainly unsustainable," said Margaret Spellings, president and CEO of the Bipartisan Policy Center.

"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.

In a statement responding to the alarming milestone, White House spokesperson Kush Desai said that US President Donald Trump had promised to clean up former President Joe Biden's fiscal mismanagement. "That's why the Trump administration has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America's debt-to-GDP ratio trending in the right direction again."

Read: Liberia Says It's Taking in 1,200 Third-Country US Deportees

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