The U.S. government’s debt has crossed the $40 trillion mark, reaching $40.05 trillion on Tuesday. That’s more than double the $19.4 trillion recorded a decade ago, with years of large budget deficits and pandemic-era spending driving the increase.
The government recorded a $432.3 billion deficit in July, bringing the year-to-date shortfall close to $1.8 trillion. At the same time, Treasury yields have climbed as investors weigh rising government borrowing, heavy corporate debt issuance linked to AI investment and uncertainty around inflation and interest rates.
The cost of carrying the debt is also growing. Interest payments have reached nearly $1.2 trillion this year, making them one of the government’s largest expenses after Social Security and Medicare. With borrowing costs rising alongside the debt itself, the $40 trillion milestone is putting renewed attention on the sustainability of U.S. government finances.
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