WASHINGTON, D.C. / RankWire.AI / – The total U.S. gross national debt has exceeded $40 trillion for the first time, reaching $40.047 trillion on Aug. 18, according to U.S. Treasury figures. By Aug. 27, this amount had increased to approximately $40.078 trillion. Of this, around $32.314 trillion was debt held by the public, with government accounts managing about $7.764 trillion.
This significant milestone was achieved less than five months after the federal debt surpassed $39 trillion in March. In August 2016, the gross national debt was approximately $19.5 trillion, roughly half of today’s figure. The federal government’s debt rises when spending exceeds revenue, primarily financed by issuing Treasury bills, notes, and bonds to investors and government accounts.
Federal financial stability continues to be strained by sizable annual budget shortfalls. The Congressional Budget Office reported a deficit of $1.8 trillion for the first 10 months of fiscal 2026. This figure was $169 billion higher than the same period in fiscal 2025. While revenue grew by $139 billion, or 3%, federal expenditures increased by $308 billion, or 5%. The CBO projects the full-year deficit to hit around $2.1 trillion.
Interest payments on debt top $1 trillion
Interest costs are now consuming a larger portion of the federal budget. Net interest expenses are forecasted to exceed $1 trillion in fiscal 2026, up from roughly $970 billion in 2025. This amount represents about 3.3% of the U.S. gross domestic product. Projections indicate that annual net interest payments will reach $2.1 trillion by 2036, which would equal approximately 4.6% of GDP.
Publicly held debt relative to the economy also continues to rise. Current estimates suggest it will be around 101% of GDP in 2026, climbing to 120% by 2036. The highest historical peak was 106% in 1946, post-World War II. Under the same baseline, publicly held debt could approach $56 trillion, with gross federal debt nearing $64 trillion by 2036.
The debt load influences borrowing and economic growth
A substantial level of federal borrowing impacts the broader economy by potentially raising interest rates and reducing private sector investment over time, according to the Congressional Budget Office. This decrease in private investment limits capital available for expansion and productivity improvements, which can also affect wages and household incomes. Consumer borrowing costs, including mortgage rates and auto loans, are affected by various factors, including overall interest-rate conditions.
While gross national debt and the federal deficit are distinct indicators of the government’s fiscal health—tracking total obligations and annual spending gaps respectively—both remain high in fiscal 2026. The gross debt exceeds $40 trillion, and the projected deficit is around $2.1 trillion, representing about 5.8% of GDP compared to a 50-year average of approximately 3.8%.