{
  "id": 2019332,
  "title": "US debt hits US$40 trillion high, raising ‘doom loop’ risk",
  "url": "https://urgent.news/2026/08/19/us-debt-hits-us-40-trillion-high-raising-doom-loop-risk",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-19T20:57:37.000Z",
  "source": {
    "name": "South China Morning Post",
    "slug": "south-china-morning-post",
    "url": "https://www.scmp.com/news/world/united-states-canada/article/3364613/us-debt-hits-us40-trillion-high-raising-doom-loop-risk"
  },
  "original_language": "en",
  "account": "The United States has reached a historic milestone, with its public debt surpassing the US$40 trillion mark for the first time. This figure has increased by a third in under five years, as lawmakers continue to disregard calls to address the nation's historically wide financial deficits. As of the close of business on Tuesday, the total debt stood at US$40.05 trillion, according to a release from the US Treasury Department. The crossing of the US$30 trillion mark took place only in January 2022, and there appears to be no end in sight. The debt situation has raised concerns about a potential \"doom loop,\" where rising interest costs further increase the government's borrowing needs, leading to higher yields and even more debt.\n\nRepublicans have long opposed revenue-raising tax increases, while both parties have been hesitant to agree to politically contentious cuts to healthcare and retirement benefits for seniors. Many analysts expect Congress and the administration to act only in response to a financial-market disruption, as there is limited progress anticipated in reducing the deficit-to-Gross Domestic Product ratio. US Treasury Secretary Scott Bessent acknowledged that he joined politics to tackle deficits unprecedented for times outside major wars, pandemics, or depressed job markets. However, economists, the Congressional Budget Office, and Wall Street remain largely pessimistic about any significant changes in the near future.\n\nThe high debt levels have implications for the government's borrowing costs. The latest 30-year bond auction resulted in the costliest sale in a quarter-century, and a 10-year auction a day earlier drew the highest financing cost since 2007. As investors demand higher yields, the Treasury's borrowing needs increase, exacerbating the debt situation. With two months left in the fiscal year, the government's interest costs for 2026 are estimated at US$1.17 trillion, a 15% increase from the same period a year prior. This situation adds to the debt, potentially triggering a vicious cycle where higher interest costs fuel further investor calls for higher rates.\n\nThe public debt figure includes both marketable Treasuries and \"intragovernmental\" debt, which reflects past surpluses in the Social Security system invested in specially issued Treasuries. The rise in US debt has accelerated during economic downturns tied to the global financial crisis and the Covid-19 pandemic, when revenue fell due to job losses, and aid payments surged. Despite policy measures by administrations over time, the deficit target set by President Donald Trump fell short of the projected 3% of GDP by the end of his second term in January 2029. Trump is now considering new tax-cut promises and defense spending increases to address the issue. The government is nearing the statutory debt ceiling of US$41.1 trillion, which is expected to trigger partisan showdowns in Washington to prevent a potential default.",
  "summary": "Total US public debt surpassed US$40 trillion for the first time, and has now surged by a third in less than five years, as US lawmakers continue to shrug off calls to contend with historically wide financial deficits. Public debt outstanding stood at US$40.05 trillion as of the close of business on Tuesday, a US Treasury Department release on Wednesday showed. The crossing of the US$30 trillion…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}