Total United States debt has passed $40 trillion for the first time, the Treasury Department said (Geo News; CNBC; NBC News).
The Treasury’s daily cash and debt balances statement put total public debt outstanding at $40.047 trillion on Tuesday, including $32.266 trillion of Treasury securities held by the public and $7.782 trillion of intragovernmental holdings. The threshold was crossed about four and a half years after debt topped $30 trillion.
The pace is the point. The figure has more than doubled in less than a decade, from $19.95 trillion when Donald Trump was first sworn in in January 2017. Roughly a third of that increase came during two years of emergency borrowing to fund the Covid-19 response under Trump and Joe Biden; the rest reflects fiscal choices made since.
Budget watchdog groups had anticipated the threshold for weeks and warned that a full-blown debt crisis could develop unless lawmakers confront the outlook by raising taxes or curbing spending, with ballooning costs for social safety-net programmes and interest payments driving the trajectory.
The interest line is what makes this different from previous milestones. Interest on the debt has totalled nearly $1.2 trillion this year and is now the largest single budget expenditure outside Social Security and Medicare — servicing costs rise with both the stock of debt and the rate paid on it, and they compete directly with everything else.
For a country like Pakistan the number matters indirectly but materially. US borrowing costs set the floor for global rates, and emerging-market issuers price against Treasuries — which is the same market Pakistan is approaching as it seeks an Exchange Stabilisation Facility from the US Treasury and works to extend bilateral loan maturities to ten years.
The milestone lands as President Trump announces sweeping new economic measures against Iran and a war entering its seventh month continues to push energy prices higher.
