The U.S. national debt crossed another historic milestone on Wednesday as it topped $40 trillion for the first time in history amid persistent federal budget deficits that are causing the debt to soar higher.
Data from the Treasury Department released on Wednesday showed that the gross national debt reached $40,047,425,768,420.22 as of Aug. 18.
The $40 trillion milestone comes after the federal government's debt burden crossed the $39 trillion threshold about five months ago in March, which closely followed the $38 trillion mark being crossed in October 2025.
America's national debt is growing rapidly due to surging interest costs, which are rising because of a larger debt burden and higher interest rates, as well as growth in federal spending on Social Security and Medicare amid the aging of the U.S. population.
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A March estimate by the nonpartisan Congressional Budget Office (CBO) estimated that the gross national debt will rise to $63 trillion in 2036, with annual budget deficits widening from about $2.1 trillion, the agency's estimate for the current fiscal year, to $3.1 trillion a year a decade from now.
The gross national debt topping $40 trillion follows another recent debt milestone that puts the burden in context relative to the size of the U.S. economy.
The debt held by the public, a measure economists prefer to use in comparing a nation's debt to the size of its economy, reached $31.27 trillion in late March and topped the $31.22 trillion in gross domestic product (GDP) – marking the first time in about 80 years the public debt was larger than the economy.
Debt held by the public is projected to break the record of 106% of GDP that was set in 1946, when the U.S. was in the process of demobilization after the war ended, in the next few years, before rising to an estimated 120% of GDP in 2036, per the CBO's estimate.
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Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told FOX Business, "For the millions concerned about affordability, let's start by asking Washington to take notice that the national debt just hit $40 trillion," adding that the debt has doubled in under 10 years and that "we must change course."
"The more debt we take on, the more interest costs we have to bear, which now even exceed the cost of national defense. And every trillion we add to our debt contributes to higher interest rates and inflation, increasing the mortgages, car loans and credit card bills of all Americans," he said.
"At the same time, debt harms economic growth, slowing wage increases while the cost of living continues to rise."
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The CBO's budget outlook from this spring noted that the debt held by the public is projected to grow faster than the U.S. GDP in the years ahead, which could slow economic growth and reduce private investment, while causing interest costs to rise further.
CBO warned that would also increase the risk of a fiscal crisis, in which investors lose confidence in the value of the U.S. government's debt, as that could cause interest rates to rise abruptly and cause other economic and financial disruptions.
For example, those dynamics could increase inflation expectations that may, in turn, degrade the dollar's status as the dominant international reserve currency.
"The only good thing about our fiscal challenge is that there are many available solutions, and the budget is entirely within our control," Peterson said, noting that U.S. adversaries like China, Russia and Iran likely enjoy seeing the country devalue its economic future.
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"If we want to improve our living standards, today and for the next generation, now is the time for lawmakers to put our nation on a more affordable and sustainable path," he added.