1 week ago
US Debt Tops $40 Trillion Amid Deficits and Tariff Pressure
The United States government now owes more than $40 trillion.
This is the first time the debt has reached that amount.
The government often spends more money than it collects in taxes, so it borrows to cover the difference.
Borrowing during the COVID-19 pandemic made up about one-third of the increase since 2017.
Policies under both the Trump and Biden administrations also contributed to the rise.
Interest payments and future costs for Social Security and healthcare add to the burden.
Higher borrowing costs mean the government may have to pay more to borrow money.
Some experts say lawmakers may need to raise taxes, reduce spending, or do both.
Treasury Secretary Scott Bessent announced larger bond buybacks to support the long-term bond market.
US total public debt reached $40.047 trillion at the close of business Tuesday, Treasury data showed.
The debt includes $32.266 trillion held by the public and $7.782 trillion in intra-governmental debt.
Persistent deficits, pandemic borrowing, interest costs and long-term obligations have driven the increase.
The debt has more than doubled since Donald Trump first took office in January 2017.
Treasury Secretary Scott Bessent plans to double Treasury buybacks for 10- to 30-year bonds to at least $4 billion per operation.
- Who
- The United States government, Treasury officials, lawmakers, investors and budget experts, including Jessica Riedl and Scott Bessent.
- What
- US total public debt surpassed $40 trillion for the first time.
- Where
- The United States.
- When
- The milestone was recorded at the close of business on Tuesday, with the report published August 20, 2026.
- Why
- Persistent budget deficits, pandemic borrowing, government obligations, rising interest costs and recent tariff-related pressure have increased borrowing.
Fiscal Watchdogs
Policy Context
Cause of the debt surge
Fiscal Watchdogs
Budget experts and watchdogs emphasize persistent deficits of roughly $2 trillion, saying spending has exceeded revenue even during peace and economic growth.
Policy Context
The reported increase reflects multiple factors, including policies under both the Trump and Biden administrations, long-running spending and tax imbalances, and emergency borrowing during the COVID-19 pandemic.
Tariffs and recent pressure
Fiscal Watchdogs
The report says Trump’s now-invalidated tariffs contributed to recent borrowing pressure and raised concerns about the fiscal outlook.
Policy Context
The debt increase cannot be attributed to tariffs alone; the article also identifies pandemic spending, interest payments, Social Security, healthcare obligations and broader fiscal imbalances.
Possible response
Fiscal Watchdogs
Budget watchdogs say lawmakers may need to raise taxes, cut spending, or take both steps to avoid a deeper fiscal crisis.
Policy Context
Treasury Secretary Scott Bessent has announced larger Treasury buybacks as a measure intended to support the long-term bond market, rather than immediately focusing on tax increases or spending cuts.
Key facts
- Total debt
- $40.047 trillion
- Debt held by the public
- $32.266 trillion
- Intra-governmental debt
- $7.782 trillion
- Deficit level
- About $2 trillion annually in recent years, according to Jessica Riedl
- Debt growth since January 2017
- More than doubled
- Foreign Treasury holdings
- Foreign investors hold nearly one-third of US Treasury securities
- Planned Treasury buybacks
- At least $4 billion per operation for 10- to 30-year bonds
Quotes
Scott Bessent
U.S. Treasury Secretary
“"We are planning to double the size of Treasury buybacks for 10‑ to 30‑year bonds to at least $4 billion per operation,"”
news18.com
Jessica Riedl
Budget and tax fellow at the Brookings Institution
“"It’s been well known for a while that the United States government was on a pretty unsustainable path with deficits,"”
news18.com
Sources
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