US national debt doubled in about a decade and crossed the $40 trillion mark
The US government debt has reached $40.05 trillion, doubling over the past decade. The US Treasury Department announced the milestone 4.5 years after the debt crossed the $30 trillion threshold.
The US government debt has crossed the $40 trillion mark, about 4.5 years after it surpassed the $30 trillion threshold, the US Treasury Department announced today. The total US debt reached $40.05 trillion on Monday.
The debt consists of government bonds held by the public (private and institutional investors and foreign governments) totaling $32.27 trillion, and intra-governmental debt totaling $7.78 trillion. Reuters notes that the federal debt has doubled in about a decade; in January 2017, when Donald Trump was sworn in as president for the first time, the debt stood at $19.95 trillion.
Reuters indicates that about a third of this increase is attributed to debt issuance during the COVID-19 period led by Donald Trump and former president Joe Biden. The fiscal policy of both presidents, combined with a persistent imbalance between tax revenues and expenditures, is responsible for the rest of the increase.
Public organizations that monitor the budget had predicted the crossing of this threshold for weeks and warned of a debt crisis in the US unless lawmakers raise taxes, cut spending, or combine both measures.
"A $40 trillion debt does not exist only in the government's accounting books; it is felt throughout the economy and finds its way into people's wallets in one way or another," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
According to her, the more the government borrows, the more it exacerbates inflation, crowds out other budget priorities, and leaves the country vulnerable to domestic emergencies and shocks abroad. MacGuineas noted that the $40 trillion threshold was crossed less than five months after the debt reached $39 trillion, and that it has grown fourfold in less than 20 years.
The US Treasury Department announced today that it will more than double the volume of buybacks of long-term government bonds, an announcement that triggered sharp declines in the yields of those bonds. In the latest monthly report, the US Treasury Department reported a deficit of $432.3 billion in July, the highest monthly amount since March 2021. The deficit since the beginning of the year is approaching $1.8 trillion, higher than in the same period last year.
