WASHINGTON, D.C. / RankWire.AI / – The total gross national debt of the United States has broken the $40 trillion barrier, setting a new record for federal borrowing. U.S. Treasury data revealed that on Aug. 18, the debt reached $40.047 trillion. By Aug. 27, it had increased to approximately $40.078 trillion. Of this total, roughly $32.314 trillion was debt held by the public, while the remaining $7.764 trillion was held by government accounts.
This achievement occurred less than five months after the federal debt crossed the $39 trillion mark in March. In August 2016, the gross national debt was near $19.5 trillion, about half of today’s figure. The growth in debt results from federal spending exceeding revenue, which the government addresses primarily by issuing Treasury bills, notes, and bonds to investors and government accounts.
The U.S. government’s fiscal situation remains strained due to significant annual budget deficits. The Congressional Budget Office reported a $1.8 trillion deficit for the first ten months of fiscal 2026. This is $169 billion higher than the same period in fiscal 2025. Revenue increased by $139 billion, or 3%, while federal outlays surged by $308 billion, or 5%. The agency projects the full-year deficit will reach roughly $2.1 trillion.
Federal interest payments top $1 trillion
Interest expenses are taking up a larger portion of the federal budget. Net interest payments are projected to surpass $1 trillion in fiscal 2026, up from about $970 billion in 2025. This amount represents approximately 3.3% of the U.S. gross domestic product. Forecasts indicate that annual net interest costs could reach $2.1 trillion by 2036, which would constitute about 4.6% of GDP at that time.
Publicly held debt has also increased relative to the nation’s economic size. Current estimates place this measure at about 101% of GDP in 2026 and projected to rise to 120% by 2036. The highest historical peak was 106% in 1946, following World War II. Under the same baseline, publicly held debt could approach $56 trillion by 2036, with gross federal debt nearing $64 trillion.
The debt load influences borrowing costs and economic growth
Substantial federal borrowing also impacts financial conditions across the broader economy. The Congressional Budget Office has determined that increased government borrowing can push interest rates higher and diminish private investment over time. This reduction in capital available for business expansion and productivity improvements can, in turn, affect worker wages and household incomes. Consumer loans, such as mortgages and auto loans, are influenced by multiple factors, including prevailing interest-rate levels.
While gross national debt and the annual deficit are related, they measure different aspects of the government’s fiscal health. The debt accumulates federal obligations over time, whereas the deficit reflects the yearly shortfall between government spending and revenue. Both indicators remain high in fiscal 2026, with gross debt exceeding $40 trillion and the deficit estimated at $2.1 trillion. This deficit accounts for roughly 5.8% of GDP, compared to the 50-year average of approximately 3.8%.