US government debt sets new record amid huge deficit
The United States' national debt has surpassed $40 trillion for the first time in history. According to the Treasury Department, as of the close of August 18, total outstanding federal debt reached about $40.047 trillion, up from roughly $39.987 trillion the previous day. The data were published on August 19.
The milestone applies to gross national debt, which includes obligations to investors, the Federal Reserve System, and other external holders, as well as securities held in the accounts of federal government funds. The Treasury itself publishes this figure daily in its Debt to the Penny database.
Debt held directly by investors and other holders outside the federal government stood at about $32.266 trillion on August 18. Economists more often focus on this measure when assessing the US debt burden, since it better reflects the amount of funds the government must raise in financial markets.
Debt up by roughly $3 trillion in a year
The pace of debt accumulation has also become a major concern. Over the past year, gross US debt has increased by about $3 trillion. According to Financial Times calculations, this is the fastest annual increase outside the pandemic period. Over the last ten years, total national debt has nearly doubled.
One reason remains a large budget deficit. In the first ten months of fiscal year 2026, the federal government has already borrowed about $1.8 trillion. In July alone, the deficit stood at approximately $432 billion.
The rise in debt is becoming particularly sensitive due to high interest rates. The more expensive it is for the US to refinance its issued bonds, the larger the share of the federal budget that goes toward servicing the accumulated debt.
Interest costs may exceed $2 trillion
The Congressional Budget Office projects that the federal government's net interest costs will be around $1 trillion in 2026. By 2036, under the current trajectory, they could exceed $2.1 trillion per year and reach 4.6% of GDP.
The CBO also expects that debt held by the public and investors will continue to grow faster than the economy: from about 99% of GDP at the end of 2025 to 120% of GDP by 2036.
Crossing the $40 trillion mark itself does not mean an immediate debt crisis. The US remains the largest sovereign bond market, and American securities continue to play a key role in the global financial system. However, accelerating debt accumulation and servicing costs raises financial markets' sensitivity to Washington's fiscal policy and changes in interest rates.
Kyiv Post reported that US national debt stood at about $39.64 trillion as of July 22. Thus, in less than a month, it increased by roughly another $400 billion.
Based on materials from: US Treasury Department, Congressional Budget Office, Financial Times
