US national debt exceeds US$40 trillion for first time

The United States has reached a historic milestone: government debt surpassed $40 trillion for the first time, according to data released by the Treasury Department on Wednesday. This surpasses an earlier estimate from the Congressional Budget Office, which projected borrowing would reach $39.4 trillion by the end of fiscal year 2026.

The surge in borrowing is attributed to a combination of factors, including Trump's invalidated tariffs, growing obligations linked to social security and health care, and inflation concerns driving up borrowing costs. The war in the Middle East has also put pressure on the administration, costing $37.5 billion in military spending alone.

Defense spending shows no signs of slowing, with the House of Representatives approving a record $1.15 trillion in funding for the Pentagon. Republicans and Democrats have criticized the debt surge, with some urging Congress to curb spending and balance the budget. Analysts warn that while there is no fixed debt-to-GDP level triggering a crisis, the record debt poses risks for financial markets and could lead to higher borrowing costs for consumers and businesses, potentially squeezing the economy.