WASHINGTON — The national debt of the United States has surpassed $40 trillion for the first time, according to data from the U.S. Treasury Department. The Treasury Department’s daily statement showed total public debt outstanding at $40,001,294,658,000.00 on a specific date in 2024. The milestone was reached in 2024, during the presidency of Donald Trump, who had campaigned on promises of fiscal restraint and reducing the national debt.
The figure represents an increase of about $2 trillion within a year, as the federal government continued to run large budget deficits. The debt surpassed $35 trillion in 2024, just months before reaching $40 trillion.
The rising debt has been accompanied by higher borrowing costs, as interest rates on U.S. Treasury securities have climbed. The Treasury Department reported that net interest payments on the federal debt surpassed $1 trillion annually for the first time in 2024. The average interest rate on the national debt has risen to over 3% in 2024, up from below 2% in previous years.
The increase in borrowing costs has been attributed to the Federal Reserve’s interest rate hikes, which have raised yields on government bonds. Interest payments now exceed spending on many major programs.
The fiscal situation has become a central issue in the 2024 presidential campaign, with candidates debating fiscal policy. Trump has defended his economic record while critics point to the rising debt, which has been driven by a combination of tax cuts, increased spending, and economic factors. The debt ceiling was suspended in 2023 as part of a bipartisan agreement, but the issue is expected to resurface.
The Treasury has warned that the government may run out of cash without action from Congress. The Congressional Budget Office has projected that the debt will continue to grow in the coming years, reaching 122% of GDP by 2034. The CBO also projected that the debt will reach $50 trillion by 2030 if current policies remain unchanged.
The CBO estimated that interest costs will account for a growing share of federal spending, with net interest payments expected to become the largest single expenditure by 2025. The rising debt has also been a topic of international concern, as foreign holders of U.S. debt, including China and Japan, have adjusted their holdings.
Treasury data shows that foreign holdings of U.S. debt have remained significant, but some countries have reduced their exposure. The milestone comes as the U.S. economy shows mixed signals, with strong growth but persistent inflation. The Federal Reserve has maintained high interest rates to combat inflation, which has increased the cost of government borrowing.
The debt surpassing $40 trillion marks a significant moment in U.S. fiscal history, as the country faces growing challenges in managing its finances. The rising debt has raised concerns among economists about long-term economic stability and the nation’s fiscal trajectory.
