A milestone arrives ahead of schedule
The US national debt passed $40 trillion for the first time this week, according to the Treasury Department. The record came much earlier than expected. The Congressional Budget Office projected in May 2023 that the country would not cross the mark until fiscal year 2028.
The pace of borrowing has accelerated sharply. The government added about $1.8 trillion to the debt in the past five months. It passed $39 trillion in March and $38 trillion in October.
What is driving the borrowing
Several forces are pushing the debt higher. Defense spending continues to grow. Social programs such as Social Security and Medicare take up a large share of the federal budget. Tax cuts enacted under the One Big Beautiful Bill Act reduced government revenue, and tariff refunds added to the strain.
Interest payments are also growing fast. With the debt larger and interest rates higher than in past years, the government now spends more than $1 trillion a year on interest alone. That is a record, and the figure keeps climbing.
The cost of the debt
Economists warn that large interest payments leave less room for other spending, and that the borrowing trend cannot continue forever. Budget advocates say the long-term path of borrowing more and paying more in interest will force harder fiscal choices ahead.
"Our current fiscal trajectory is plainly unsustainable, and that's the best-case scenario," said Margaret Spellings, a longtime advocate for balanced budgets. "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."