The United States national debt has passed $40 trillion for the first time, more than doubling in less than a decade, according to Treasury Department figures.
The Treasury’s daily cash and debt balances statement put total public debt outstanding at $40.047 trillion as of August 18. That figure comprises about $32.266 trillion in Treasury securities held by the public and the remainder in intra-governmental holdings.
The total stood at $19.95 trillion in January 2017. It covers all outstanding Treasury bonds, bills and notes.
Faster than forecast
The Congressional Budget Office had projected that overall borrowing would reach $39.6 trillion only by the end of the 2026 fiscal year. Crossing $40 trillion ahead of that estimate has sharpened concerns about how quickly the government’s borrowing needs are growing and what that implies for future interest costs.
The CBO says the US is now approaching its $41.1 trillion debt ceiling, and projects debt climbing to roughly $64 trillion by 2036.
The increase reflects years of heavy spending under both the Trump and Biden administrations, together with rising interest payments that have compounded the total, alongside growing costs for social safety-net programmes that outstrip revenues.
Bond market reaction
The interest rate on 30-year Treasury bonds reached 5.34% on Tuesday, the highest in almost 20 years. Those yields influence what the US government, companies and consumers pay to borrow, feeding into mortgages, car loans and credit cards.
The recent surge in yields has been driven partly by rising oil prices linked to the US-Iran war, with investors worried about inflation. Analysts have also pointed to the scale of borrowing by technology firms funding artificial intelligence development, where the timing and size of returns remain uncertain.
Economics professor David Jacks said that while ordinary people are unlikely to feel an immediate effect, difficulties in managing the debt could eventually trigger disruption on a scale comparable to the 2008 financial crisis.
The view from Colombo
Higher US yields matter for frontier borrowers such as Sri Lanka because they raise the global benchmark against which emerging-market debt is priced, making future commercial borrowing more expensive. Sri Lanka is still working through the restructuring that followed its 2022 default, and investors have this month been weighing reserve targets and repayment schedules running to 2030. The same inflation anxiety driving Treasury yields has also pushed gold to a two-month high.
