US national debt tops $40 trillion for first time

The US national debt has surpassed $40 trillion for the first time in history, according to the Treasury Department's daily report, which recorded the total at $40.047 trillion Source: Excelsior. The milestone comes less than five months after the debt crossed $39 trillion, reflecting an accelerating pace of borrowing Source: El Colombiano. The debt has more than doubled in a decade, rising from just under $20 trillion in 2016 Source: CNN.

Drivers

The increase is attributed to persistent fiscal deficits, with the government spending more than it collects. Key factors include tax cuts, increased military spending related to the war with Iran, and the Supreme Court's February ruling that declared the Trump administration's global tariffs illegal, cutting off a revenue source Source: El Colombiano. The Treasury reported a deficit of $432.3 billion in July, the largest monthly deficit since March 2021 Source: La Vanguardia.

Debt burden

Interest payments on the debt now exceed $1 trillion annually, making it the second-largest budget item after Social Security Source: La Republica. The debt held by the public is about $32.3 trillion, roughly 100% of GDP, approaching levels not seen since World War II Source: ABC. The 30-year Treasury yield reached 5.3%, its highest since 2007, reflecting investor concerns Source: Excelsior.

Reactions

Maya MacGuineas of the Committee for a Responsible Federal Budget called the debt "unsustainable," warning of inflation and crowding out Source: CNN. The Treasury announced it will double its bond buyback operations to support liquidity Source: La Republica. Critics note that President Trump's promise to reduce the debt has failed, with the deficit projected to reach 5.8% of GDP this year Source: La Vanguardia. The situation also pressures emerging economies like Colombia, which may face higher borrowing costs Source: La Republica.