Total government debt The USA For the first time, it exceeded the historical limit of $40 trillion, according to evidence announced on Wednesday. US Treasury, triggering new warnings about the risk of a budgetary crisis.
The explosive increase in expenditure on social security programmes and interest payments goes far beyond state revenue, which at the same time has been affected by tax reductions, says the reuters.
According to the Ministry of Finance's last daily cash and debt statement, total outstanding government debt They amounted on Tuesday to $4047 trillion..
Of these, 32,266 trillion. dollars relate to U.S. Treasury titles in the hands of the investment public, while another 7,782 trillion. dollars correspond to intra-government debt.
Over doubled in less than a decade
The total obligations of the federal government have now more than doubled within less than a decade. In January 2017, when the Donald Trump He was first sworn President of the United States, the debt amounted to $19.95 trillion.
About a third of the increase occurred during two years of explosive state loans to finance pandemic measures Covid-19, both on Trump and on the former President Joe Biden.
The balance is attributed to the budgetary choices of the two Presidents, together with the chronic imbalances between tax revenue and state expenditure.
Organizations monitoring the course of American public finances have been waiting weeks for the 40 trillion dollar threshold to be exceeded. Some warn that a full debt crisis could arise if legislators do not face the unsustainable fiscal path through tax increases, cost cuts or a combination of the two.
«This grim milestone is yet another reminder that it is time to face a fundamental mismatch», said Margaret Spellings, CEO of Bipartisan Policy Center.
«Our federal programs spend much more than the government collects and the federal budget's biggest spending is all working on autopilot.», note.
As he warned, federal debt already increases the cost of living and limits other costs and investments, threatening the long-term prospects of the American economy.
Concern in the bond market
Foreign US creditors may already appear more cautious.
A few days after a $25 billion US bond auction, held at the highest yield since 2021, long-term securities yields reached the highest levels in the last nearly two decades on Tuesday.
Investors demand higher yields to absorb the U.S. government's large debt issues.
On Wednesday, US Finance Minister Scott Bessend he went on to make a significant intervention aimed at restricting long-term bond yields, announcing a doubling in the size of repo instruments of between 10 and 30 years, to at least $4 billion per transaction.
At the same time, the term premium of the 10-year American bonds, an indicator of the additional compensation that investors require for the risk of their long-term possession, rose this week to the highest level of the last more than 12 years.
Demand for American debt by foreign investors, who hold nearly a third of American state bonds, has retreated in recent year, according to John Kanavan of Oxford Economics.
This means that more bonds should be absorbed by investors more price-sensitive, which can enhance market volatility.
The deficit continues to swell
The US Treasury announced last week the fourth highest monthly budget deficit in US history, $432 billion for July.
Duty refunds led to net customs revenue on negative territory for a third consecutive month, while expenditure on Social Security and Medicare continued to increase.
The budget deficit in the first ten months of the financial year 2026 has already exceeded the total deficit of the entire financial year 2025, although there are still two months left.
During Trump's first term, public debt increased by 7.8 trillion. dollars, with more than half of the increase accumulated over the last nine months of his tenure, amid a pandemic.
Since his return to the White House in January 2025, American debt has increased by another $3.8 trillion. Overall, during his two terms to date, the increase reaches $11.6 trillion.
On Biden, public debt increased by 8.4 trillion. dollars, a period also characterized by high spending on recovering from the pandemic, but also by large investments in infrastructure, clean energy subsidies and other government priorities.
The independent Committee for a Responsible Federal Budget estimates that the political choices of both Trump and Biden exacerbated the path of federal debt in relation to what would result from the implementation of existing legislation when each took over his duties.
Debt exceeds US GDP by 20%
The total federal debt is now about 20% higher than the US's annual economic output.
The rapid expansion of debt-to-GDP ratio in the 21st century is largely due to the state reaction to the 2007-2009 financial crisis and the 2020 pandemic.
At the same time, the iconic legislative package of the second term Trump, the One Big Beautiful Bill Act, is expected to add another 4.7 trillions. dollars in debt, according to the Congressional Budget Office (CBO).
Trump has presented his second presidential term as a period of state spending limitation, with initial job cuts in federal agencies. However, much of the reductions concern so-called «distinctive» expenditure, which is the smallest part of the federal budget.
The U.S. spends about $7 trillion a year, with about 60% heading for mandatory programs such as Social Security, Medicare, Medicaid and veteran care.
Interest exceeded defense spending
One of the biggest problems is now the cost of debt service itself.
About $1.1 trillion is directed at paying interest on American borrowing, with the cost rising as total debt swells and interest rates remain high.
The fiscal year 2025 was the first time debt service costs exceeded Pentagon funding.
In the first ten months of the financial year 2026, interest expenditure has even exceeded Medicare's expenditure, now becoming the second largest category of federal budget expenditure, behind only Social Security.
The US spends more and more to meet the pension and health needs of the baby boomers generation, putting pressure on Social Security and Medicare funds, while income from payroll and income taxes is not enough to cover total federal costs.
Interest payments on a 12-month rolling basis have exceeded $1 trillion since early 2024 and are more than twice as high as 2020.
With US government bond yields remaining high and new debt issues rising, interest costs are expected to continue to swell.
Source: Newmoney. gr
