US national debt exceeded 40 trillion dollars amid rising expenditures
The US national debt has reached 40 trillion dollars against the backdrop of high budget spending and rising interest rates. However, leading economists emphasize that there is no threat of an immediate default for the world's largest economy. This was reported by Economichna Pravda citing Brookings Institution, according to the portal PromPolitInform.
The total public debt of the United States has doubled since January 2017, when Donald Trump first took office as president. During his first term, the debt increased by 7.8 trillion dollars, partly due to spending on pandemic countermeasures. During Joe Biden’s time in office, this figure grew by another 8.4 trillion dollars amid large-scale infrastructure packages and coronavirus crisis expenditures. Following Donald Trump’s return to the White House in January 2025, debt obligations added another 3.8 trillion dollars. The increase in the fiscal burden occurred against the backdrop of rising defense spending due to the war with Iran and the return of overpaid tariffs to importers.
Causes of rapid debt accumulation
Experts attribute the rapid growth of debt to the inevitable consequence of public demands for tax breaks, expanded social benefits, and defense investments. “The rapid increase in the US national debt is an inevitable consequence of Americans’ demands for endless tax benefits, expansion of social payments, defense investments, and the refusal to solve the health insurance system deficit problem,” noted Jessica Riedl of the Brookings Institution. An additional factor was two major crises—the 2007–2009 mortgage crisis and the 2020–2023 pandemic—which required large-scale government borrowing. Each year, the US government spends about 7 trillion dollars, with nearly 60 percent going to various social programs, while tax revenues fail to keep pace with these expenditures.
Market reaction and bond yields
Against the backdrop of reaching the milestone debt limit, the yield on thirty-year US Treasury bonds reached 5.3 percent, the highest figure since 2007. “First, the demand for borrowed funds exceeds their supply. Second, the increase in the risk premium: investors doubt the country’s ability to service the debt and fear that the authorities will declare a default or allow inflation to rise to reduce the debt,” explained Nobel laureate in economics Paul Krugman. At the same time, US Treasury Secretary Scott Bessent announced the doubling of the planned government paper buyback program to 4 billion dollars, and on September 9 the government announced a similar operation for 6 billion dollars. Such steps indicate Washington’s readiness to sacrifice the exchange rate of the dollar in order to curb yields on debt securities.
Prospects and expert assessments
Despite the fact that the total amount reached 40.14 trillion dollars, most analysts rule out the risk of an acute crisis or default. “There is no direct threat of a crisis, but the growth in yields points to problems. If they are ignored, at some point a large-scale outflow of investors from US debt will begin,” noted financial journalist John Authers. Experts compare the current situation to an indicator light in a car, which warns that a process is getting out of control, but does not indicate an immediate engine stop. Since the US borrows in its own currency and holds the status of the dollar as the primary reserve currency, the state has a significantly greater margin of safety compared to other countries in the world.
Illustrative photo: MeanieHyaena / CC BY 4.0
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