WASHINGTON, D.C. / RankWire.AI / – The United States has crossed the $40 trillion mark in gross national debt, setting a new record for federal borrowing. U.S. Treasury reports show the total reaching $40.047 trillion on Aug. 18. By Aug. 27, this number increased to around $40.078 trillion. Out of this, about $32.314 trillion is debt held by the public, and approximately $7.764 trillion is owed by government accounts.
This milestone was reached less than five months after the debt first surpassed $39 trillion in March. In August 2016, the gross national debt was near $19.5 trillion—about half of today’s figure. The government accumulates debt when federal spending exceeds income. It finances these shortfalls primarily by issuing Treasury bills, notes, and bonds to investors and government accounts.
Federal financial health remains strained by large annual budget deficits. The Congressional Budget Office reported a $1.8 trillion deficit for the first 10 months of fiscal 2026. This is $169 billion higher than the same period in fiscal 2025. Revenue increased by $139 billion, or 3%, while outlays grew by $308 billion, or 5%. The agency projects a full-year deficit of roughly $2.1 trillion.
Federal interest payments surpass $1 trillion
Interest costs are taking up a larger part of the federal budget. In fiscal 2026, net interest expenses are expected to go over $1 trillion, up from about $970 billion in 2025. This accounts for approximately 3.3% of U.S. gross domestic product. Projections indicate that by 2036, annual interest payments could reach $2.1 trillion. At that point, they would represent about 4.6% of GDP.
Publicly held debt as a share of the economy has also increased. Estimates suggest it will be around 101% of GDP in 2026. By 2036, it could reach 120%. The highest level in history was 106% in 1946, after World War II. Under the same baseline, publicly held debt might approach $56 trillion by 2036. Gross federal debt could near $64 trillion.
The debt load influences borrowing and economic growth
Large federal borrowing impacts the broader economy. The Congressional Budget Office has found that increased government debt can push interest rates higher and curb private investment over time. This limits businesses’ ability to expand and improve productivity. These effects can also influence worker wages and household income. Consumer loans like mortgages and auto loans are affected by overall interest-rate trends and other factors.
Gross national debt and the federal deficit measure different parts of the government’s fiscal health. The debt shows accumulated obligations, while the deficit tracks the yearly gap between spending and income. Both are still high in fiscal 2026. The gross debt exceeds $40 trillion, and the estimated annual deficit is $2.1 trillion. This deficit makes up about 5.8% of GDP, well above the 50-year average of roughly 3.8%.