ALBAWABA- The U.S. national debt has surpassed $40 trillion for the first time, reaching $40.047 trillion at the close of business on Wednesday, according to the U.S. Treasury Department.
The total was up from $39.987 trillion a day earlier, marking another milestone in the rapid growth of federal borrowing. The figure includes about $32.27 trillion in debt held by the public and $7.78 trillion in intra-governmental holdings. The $40 trillion threshold comes less than five months after total federal debt crossed $39 trillion in March, highlighting the pace at which the government’s borrowing has increased.
US federal debt has more than doubled since January 2017, when it stood at roughly $20 trillion. The increase has been driven by years of large budget deficits, including extensive borrowing during the COVID-19 pandemic, rising spending on Social Security, Medicare and other mandatory programs, tax cuts, increased defense spending and rapidly growing interest costs.
Interest payments have become one of the fastest-growing components of federal spending, adding further pressure to the budget. As borrowing increases, a larger portion of government revenue is required to service existing debt, leaving less fiscal room for other priorities and future emergencies.
The debt milestone comes as investors continue to watch the US fiscal outlook closely. Gold prices rose sharply on Wednesday, gaining roughly 3% to 4% during the session and reaching their highest levels since early June. Analysts attributed the rally to a combination of a weaker dollar, lower real yields and renewed concerns about US fiscal sustainability. Gold's traditional safe-haven appeal has strengthened amid uncertainty over government borrowing, inflation and currency risks.
The rising debt also has broader implications for households and businesses. Higher government borrowing can contribute to upward pressure on interest rates, potentially increasing the cost of mortgages, auto loans, credit and business financing. Growing interest payments can also reduce the government's ability to fund infrastructure, education and other public programs without additional borrowing or spending cuts.
Economists have also warned that persistent deficits could constrain economic growth over time if debt service absorbs an increasing share of federal resources. If borrowing continues to rise faster than the economy, future governments could face difficult choices involving higher taxes, spending reductions or other measures to stabilize the fiscal position.
The Congressional Budget Office and other fiscal analysts expect federal debt to continue increasing under current policies, although projections vary depending on economic growth, interest rates, tax revenues and future legislation. Some long-term estimates put the national debt well above $50 trillion within the next decade.
