JNN 21st August 2026, New York: The US National debt has surpassed $40 trillion for the first time in History, reaching the milestone months earlier than expected as Washington’s borrowing accelerates amid persistent deficits, rising interest costs, and military spending.
The debt was expected to reach the milestone next year, but it has jumped by $1 trillion since March. For comparison, it took nearly 200 years for total US debt to reach $1 trillion for the first time, in 1981.
“The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad,” MacGuineas said in a statement just after the Treasury data was released.
“It is staggering how predictable the fiscal decline of a global power can become,” MacGuineas added.
As compared to other Developed Nations like Japan, China, Germany, US holds the Biggest Gross Debt,
| Country | Gross Debt | Debt to GDP Ratio |
|---|---|---|
| United States | ~$40.0 Trillion | ~124%–126% |
| China | ~$22.3 Trillion | ~99% |
| Japan | ~$9.0 Trillion | ~204%–237% |
| United Kingdom | ~$4.4 Trillion | ~102% |
| France | ~$4.3 Trillion | ~116%–118% |
| Germany | ~$3.5 Trillion | ~63% |
| India | ~$3.5 Trillion | ~84% |
Treasury Department figures released Wednesday showed total outstanding debt reaching about $40.05 trillion, equivalent to roughly $119,000 for every person in the country or more than $366,000 per federal taxpayer. The debt has doubled since January 2017, when it stood at roughly $20 trillion.
The debt is essentially the accumulated result of annual federal budget deficits. When Washington spends more than it collects in taxes and earning in Exports other revenue, the Treasury covers the shortfall by borrowing.
Debt rose by $8.4 trillion under Joe Biden and $11.6+ trillion across Donald Trump’s terms. Driven by heavy COVID-19 pandemic spending under both administrations, along with Biden’s infrastructure/clean energy subsidies and Trump’s tax cuts.
Military commitments have added to those expenditures. Washington has reportedly spent around $195 billion in Ukraine-related assistance since the escalation of the conflict with Russia in 2022, much of it for weapons, military support and replenishing US stocks.
More recently, the US war with Iran has created another major unplanned expense. Defense Secretary Pete Hegseth said in July that the conflict had cost Washington about $37.5 billion, while the actual cost is likely to be much higher.
Interest on debt has reached $1.1 trillion, surpassing Medicare spending in the first 10 months of FY2026 to become the second-largest line item in the federal budget behind Social Security. Debt service previously surpassed Pentagon funding in FY2025.
Of the $40 trillion total, about $32.3 trillion is held by the public, while roughly $7.8 trillion represents obligations between federal government accounts. Most publicly held debt is owned domestically by pension and mutual funds, banks, individuals, companies and the Federal Reserve.
Foreign investors, who hold roughly one-third of all Treasuries, have reduced holdings over the past year, leaving debt to price-sensitive buyers and feeding volatility.
Foreign countries also hold trillions in Treasury securities, with Japan, the UK and China among the largest overseas holders.
To quell long-bond yields hitting 2007 highs, Treasury Secretary Scott Bessent announced a doubling of long-end Treasury repurchases to at least $4 billion per operation (targeting 10- to 30-year Treasuries
The buyback plan provided only brief relief. Benchmark 10-year yields climbed to 4.70% and 30-year yields reached 5.249% (near 19-year highs) shortly after, showing the intervention failed to address root causes.
Till the U.S. dollar remains the world’s dominant reserve currency. This allows the U.S. government to borrow at lower rates than other nations and print currency in its own denomination, mitigating standard default risks.
In the Present Scenario when the Petro Dollar is in the Brink of Collapse, as the US influence over the Middle East is dwindling, and lot of Developed Nations have switched to trade & Buy Oil and other products in their Local currencies, so it is not very far away that US Dollar, will be in the same line of Currencies , like Russain Rouble before and after the collapse, as shown in as follows :
The Soviet government strictly controlled the official exchange rate ( pegging ~0.60–0.75 SUR per $1 USD) Price controls were lifted in 1992, unleashing severe hyperinflation (exceeding 2,000% annually in 1992–1993).
Jan 1992: ~180 RUB / $1 USD
End of 1995: ~4,640 RUB / $1 USD
End of 1997: ~5,900 RUB / $1 USD
Redenomination (1998): Russia slashed three zeros in 1998, redenominating 1,000 old roubles into 1 new RUB.
It is now high time that the US Government, should take corrective steps to get out of this quagmire, as the rising debt is a time bomb for them, and with the rising Interest rates, it ll not be easy for ordinary Americans to pay their Bills , as with it Inflation will also rise , with the Rise in Interest Rates , due to the volatility of Treasury Bonds , and the Loss of Interest of Foreign Buyers in the Treasuries.