The US national debt now stands at $40 trillion
[August 20, 2026]
By FATIMA HUSSEIN
WASHINGTON (AP) — The national debt surpassed a record $40 trillion on
Wednesday, a staggering milestone as defense costs, social programs like
Social Security and Medicare and interest on the burgeoning deficit make
up an enormous share of federal spending.
The milestone figure was recorded just five months after the U.S. hit a
record $39 trillion debt in March. It reached $38 trillion five months
before that, in October.
The unprecedented $40 trillion figure highlights competing
administration priorities, from boosting defense spending that the U.S.
relies on to carry out President Donald Trump's almost-6-month-old war
in Iran to lowering the cost of gas and groceries.
Kush Desai, a White House spokesman, said 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.”
However, experts say the exploding debt and the latest record milestone
are already affecting Americans' pocketbooks by raising borrowing costs
for things like mortgages and cars, lowering wages from businesses that
have less money available to invest, and creating more expensive goods
and services.
“If we want to improve our living standards, today and for the next
generation, now is the time for lawmakers to put our nation on a more
affordable and sustainable path," says Michael A. Peterson, CEO of the
Peter G. Peterson Foundation, a think tank focused on U.S. fiscal
challenges.
The debt has exploded over several presidential administrations, as the
nation's leaders spend more money than it collects in taxes. In recent
memory, the multi-year COVID-19 pandemic shut down much of the U.S.
economy, where the federal government borrowed heavily during President
Trump's first term and under former President Joe Biden to stabilize the
economy and support a recovery.
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More government spending was approved after Trump signed
Republicans’ tax cut and spending legislation into law last year.
Advocates for a balanced budget also warn that the long-term trend
of borrowing more and paying more in interest will force Americans
to face tougher fiscal tradeoffs ahead.
"The federal debt is already raising the cost of living and choking
out other spending and investment, threatening our economy and
Americans’ long-term prosperity,” said Margaret Spellings, president
and CEO of the Bipartisan Policy Center.
“Our current fiscal trajectory is plainly unsustainable, and that’s
the best-case scenario. AI disruption, a recession, global war, or
any number of other events could quickly push us over the edge from
a challenge into a full-blown crisis," Spellings said in a
statement.
The U.S. is subject to a statutory debt limit, or a limit to federal
borrowing, which Congress has the authority to set, adjust or
abolish. The Bipartisan Policy Center estimates that the U.S. will
most likely reach the $41.1 trillion debt limit sometime between
late winter and mid-summer of 2027, requiring Congress to again vote
on whether to raise or suspend it.
The U.S.' fiscal position stands as the worst among other developed
countries, according to recent data analysis from the Organization
for Economic Co-operation and Development
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