US national debt tops $40 trillion: What are the risks?

The US national debt has exceeded $40 trillion for the first time in history, according to Treasury Department data released on Wednesday.

The ominous milestone comes less than five years after the debt passed the $30-trillion mark in January 2022, a rise of more than one-third in that period. Since 2017, the debt has more than doubled.

"On our current path, we're going to be at $50 trillion in just six years," Michael Peterson, CEO of the Peter G. Peterson Foundation, a fiscal watchdog group, told CNN. "We're really putting our economy and our country's future in jeopardy."

Total public debt as a percentage of GDP reached 122.6% in the first quarter of 2026.

Under Trump's two terms, the national debt has increased by $11.6 trillion; under Biden's four-year presidency, it rose by $8.4 trillion, Reuters reported.

Trump's landmark second-term legislative package – the One Big Beautiful Bill Act – could add another $4.7 trillion, according ⁠to the Congressional Budget Office, the nonpartisan bookkeeper for federal lawmakers.

Treasury Secretary Scott Bessent, who aims to reduce the deficit to 3% of GDP by 2028 from over 6% when Trump took office, acknowledged last week that deficits were moving in the wrong direction this year, citing higher military spending for the war with Iran, tariff refunds and tax cuts.

Over the long term, the largest components of federal spending are difficult to change quickly. Social security, Medicare, and national defense account for a large share of spending, and both parties have been reluctant to cut benefits or raise taxes enough to reduce the deficit.

Why the debt is a growing concern

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said on Wednesday that rising borrowing could fuel inflation, squeeze out other budget priorities and leave the US more vulnerable to domestic emergencies and global turmoil.

Rising debt means higher interest payments and mounting fiscal pressure.

Net interest payments on the federal debt reached $931 billion in the first 10 months of fiscal year 2026, making debt service the third-largest federal budget item, surpassing defense spending. 

Interest costs are also approaching spending levels for major programs such as social security and Medicare, underscoring the growing share of federal spending devoted to debt service.

Experts warn of unsustainable US fiscal policy

"Our current fiscal trajectory is plainly unsustainable, and that's the best-case scenario," said Margaret Spellings, president and CEO of the Bipartisan Policy Center. "Even in the rosiest scenarios, we're speeding toward a cliff and refusing to turn the wheel."

Experts have expressed particular concern over rising interest costs. 

Marc Goldwein of the Committee for a Responsible Federal Budget warned that "our debt is begetting more debt" – a vicious cycle that could fuel inflation, raise borrowing costs and strain household budgets. 

The dynamic works like this: rising debt and persistent deficits push investors to demand higher Treasury yields, which increases the government's borrowing costs. Those higher yields then push up interest rates for mortgages, car loans and commercial borrowing, leaving inflation-weary consumers and businesses to foot the bill.

"Forty trillion dollars of debt doesn't exist solely on the government's ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another," MacGuineas said.