WASHINGTON, D.C. / RankWire.AI / – The total gross national debt of the United States has exceeded $40 trillion, reaching a new peak for federal borrowing. According to U.S. Treasury figures, the debt hit $40.047 trillion on Aug. 18, and by Aug. 27, it had risen to approximately $40.078 trillion. Of this, around $32.314 trillion is debt held by the public, with the remaining $7.764 trillion in government accounts.
This milestone arrived less than five months after the debt surpassed $39 trillion in March. Back in August 2016, gross national debt was near $19.5 trillion, about half of today’s figure. Federal borrowing occurs when spending exceeds revenue, primarily financed through issuing Treasury securities to investors and government accounts.
Ongoing fiscal pressures stem from significant yearly budget deficits. The Congressional Budget Office reported a $1.8 trillion shortfall for the first ten months of fiscal 2026, surpassing the same period in fiscal 2025 by $169 billion. Revenues increased by $139 billion (3%), while outlays grew by $308 billion (5%). The agency projects the total deficit for the year will reach approximately $2.1 trillion.
Interest payments on the debt now surpass $1 trillion
Interest costs are consuming a larger portion of the federal budget. In fiscal 2026, net interest is expected to exceed $1 trillion, up from about $970 billion in 2025, representing roughly 3.3% of the U.S. gross domestic product. Projections indicate that annual net interest expenses could reach $2.1 trillion by 2036, equating to roughly 4.6% of GDP at that time.
The portion of debt held by the public has also increased relative to the economy’s size. Current forecasts show this measure at about 101% of GDP in 2026 and rising to 120% by 2036. The previous peak was 106% in 1946 following World War II. Under these estimates, publicly held debt could approach $56 trillion, with gross federal debt nearing $64 trillion by 2036.
The debt burden influences borrowing and economic growth
Large-scale federal borrowing impacts the broader economy by potentially raising interest rates and diminishing private investment, according to the Congressional Budget Office. This reduction in private sector capital can hinder business expansion and productivity improvements, with possible effects on wages and household income. Consumer loans like mortgages and auto financing are also affected by overall interest-rate trends.
While gross national debt and the annual deficit measure different aspects of government finances, both remain high in fiscal 2026. Debt has crossed the $40 trillion mark, and the deficit is estimated at $2.1 trillion, representing about 5.8% of GDP compared to the 50-year average of around 3.8%.