US national debt tops $40 trillion, sparking fiscal concerns

The United States' gross national debt has surpassed $40 trillion for the first time, a milestone that has intensified debate over the sustainability of federal borrowing. The figure, confirmed by Treasury data, has doubled over the past decade and arrived roughly two years earlier than the Congressional Budget Office projected in 2023 Source: Al Jazeera. Interest costs now exceed $1 trillion annually, making debt service the second-largest budget item after Social Security Source: Cointelegraph.

The debate

Treasury Secretary Scott Bessent defended the trajectory, telling CNBC that "there's nothing magic about the 40-trillion number" and that the US can "grow our way out of that" debt level Source: CNBC. However, economists are skeptical. Alicia Garcia-Herrero of Natixis said, "The US has no chance of growing out of its debt problem through growth only" Source: South China Morning Post. Maya MacGuineas of the Committee for a Responsible Federal Budget warned that "unsustainable borrowing on this scale has huge repercussions throughout the economy" Source: CNN.

Market reaction

Coinciding with the debt milestone, the Treasury announced it would double buybacks of long-term bonds to calm a selloff that pushed 30-year yields to their highest since 2007. The move initially lowered yields and weakened the dollar, contributing to a rally in Bitcoin and gold Source: Cointelegraph. Some analysts, like Mohamed El-Erian, called the situation a "flashing yellow light," noting the dollar's reserve status gives the US a longer runway, but warned that investor appetite for US debt is "diminishing" Source: BBC.

Political context

Debt has grown by $11.6 trillion across President Trump's two terms, with $3.8 trillion added since January 2025 Source: Al Jazeera. The White House attributes the rise to inherited fiscal mismanagement, while critics point to tax cuts and spending policies Source: Fox Business.