Donald Trump returned to the White House promising to cut government waste, reduce federal spending and bring down America’s deficit. But more than a year into his second term, the US fiscal picture is facing growing pressure, with total national debt surpassing $40 trillion.

The administration launched the Department of Government Efficiency (DOGE) with an ambitious goal of identifying waste and generating major savings. However, reported savings fell far short of the initial targets, while overall government spending remained high.

Trump’s major tax-and-spending package also created a difficult fiscal trade-off. While the administration argued that lower taxes would boost investment and economic growth, reduced tax revenue can add pressure to the deficit unless spending falls sufficiently.

Tariffs were another key part of Trump’s strategy, with the administration presenting them as both a trade tool and a potential source of revenue. However, tariff revenues have faced volatility while also raising concerns about inflation and higher costs for businesses and consumers.

Trump’s Fiscal Promise Under Pressure: US Debt Surpasses $40 Trillion | Deficit And Borrowing Rise

The United States' gross national debt has crossed the $40 trillion mark for the first time, according to data from the US Treasury Department. The whopping debt highlights the growing pressure on government finances as borrowing costs rise and long-term spending commitments expand.Total public debt outstanding reached $40.05 trillion at the close of business Tuesday (Aug 18). The figure is higher than an earlier Congressional Budget Office forecast, which had projected that total borrowing would reach $39.4 trillion by the end of fiscal year 2026.Also read | <a href="https://www.wionews.com/world/trump-announces-crushing-economic-campaign-against-iran-threatens-allies-with-tremendous-penalties-1787186991774">Trump announces ‘crushing’ economic campaign against Iran, threatens allies with ‘tremendous’ penalties</a><h2>Why is US debt rising?</h2>The US government routinely borrows to cover the gap between its spending and revenue. But the scale of that borrowing has grown sharply in recent years.Long-term obligations linked to Social Security and healthcare are increasing, while higher interest rates have made servicing existing debt more expensive. Government spending, including costs linked to the war in the Middle East, and tax cuts have added to the borrowing requirement.Jessica Riedl, a budget and tax fellow at the Brookings Institution, said the US has been running deficits of roughly $2 trillion even during periods of peace and economic growth."Over the last few years, the United States has moved into roughly $2 trillion deficits, even during peace and prosperity," she told AFP.Riedl noted that deficits that once stood at around 3 per cent to 4 per cent of GDP are now closer to 6 per cent to 7 per cent, making financial markets increasingly nervous.Also read | <a href="https://www.wionews.com/world/someday-your-children-will-white-house-attacks-cnn-reporter-after-question-about-trump-aide-natalie-harp-1787018113542">'Someday, your children will...': White House attacks CNN reporter after question about Trump aide Natalie Har</a><h2>Higher interest costs add to the pressure</h2>The rise in debt comes as investors are already concerned about inflation, government spending, and the economic impact of the war in Iran.Long-term Treasury yields rose Tuesday to their highest level since 2007, increasing the cost of refinancing government debt. The Treasury moved to calm the long-term bond market early Wednesday, sending yields lower.Higher borrowing costs do not affect the government alone. If Treasury yields remain elevated, consumers and businesses could also face more expensive borrowing, potentially weighing on economic growth.<h2>Is $40 trillion a crisis?</h2>The $40 trillion milestone is significant, but it does not automatically mean the US is facing a debt crisis.Economists generally consider debt held by the public more meaningful when assessing the economic impact of government borrowing than gross national debt. Still, the milestone is a warning sign for financial markets."It has made markets more nervous," Riedl said, adding that such landmarks can prompt investors to take another look at the country's borrowing trajectory.Caleb Quakenbush of the Bipartisan Policy Center said US spending trends have not been addressed by Congress or successive administrations in a "meaningful or durable way."The US Treasury has previously set a goal of reducing the federal deficit to 3per cent of GDP, but the latest figures underline the scale of the challenge facing Washington.

America's debt has crossed a number once considered almost unimaginable. With borrowing costs rising and annual deficits still running into trillions, the US has now crossed the $40 trillion mark. But does that mean a debt crisis is coming?

The United States' gross national debt has crossed the $40 trillion mark for the first time, according to data from the US Treasury Department. The whopping debt highlights the growing pressure on government finances as borrowing costs rise and long-term spending commitments expand. Total public debt outstanding reached $40.05 trillion at the close of business Tuesday (Aug 18). The figure is higher than an earlier Congressional Budget Office forecast, which had projected that total borrowing would reach $39.4 trillion by the end of fiscal year 2026. Also read | Trump announces ‘crushing’ economic campaign against Iran, threatens allies with ‘tremendous’ penalties Why is US debt rising? The US government routinely borrows to cover the gap between its spending and revenue. But the scale of that borrowing has grown sharply in recent years. Long-term obligations linked to Social Security and healthcare are increasing, while higher interest rates have made servicing existing debt more expensive. Government spending, including costs linked to the war in the Middle East, and tax cuts have added to the borrowing requirement. Jessica Riedl, a budget and tax fellow at the Brookings Institution, said the US has been running deficits of roughly $2 trillion even during periods of peace and economic growth. "Over the last few years, the United States has moved into roughly $2 trillion deficits, even during peace and prosperity," she told AFP. Riedl noted that deficits that once stood at around 3 per cent to 4 per cent of GDP are now closer to 6 per cent to 7 per cent, making financial markets increasingly nervous. Also read | 'Someday, your children will...': White House attacks CNN reporter after question about Trump aide Natalie Har Higher interest costs add to the pressure The rise in debt comes as investors are already concerned about inflation, government spending, and the economic impact of the war in Iran. Long-term Treasury yields rose Tuesday to their highest level since 2007, increasing the cost of refinancing government debt. The Treasury moved to calm the long-term bond market early Wednesday, sending yields lower. Higher borrowing costs do not affect the government alone. If Treasury yields remain elevated, consumers and businesses could also face more expensive borrowing, potentially weighing on economic growth. Is $40 trillion a crisis? The $40 trillion milestone is significant, but it does not automatically mean the US is facing a debt crisis. Economists generally consider debt held by the public more meaningful when assessing the economic impact of government borrowing than gross national debt. Still, the milestone is a warning sign for financial markets. "It has made markets more nervous," Riedl said, adding that such landmarks can prompt investors to take another look at the country's borrowing trajectory. Caleb Quakenbush of the Bipartisan Policy Center said US spending trends have not been addressed by Congress or successive administrations in a "meaningful or durable way." The US Treasury has previously set a goal of reducing the federal deficit to 3per cent of GDP, but the latest figures underline the scale of the challenge facing Washington.

America's debt has crossed a number once considered almost unimaginable. With borrowing costs rising and annual deficits still running into trillions, the US has now crossed the $40 trillion mark. But does that mean a debt crisis is coming?

America's debt hits a staggering $40 trillion for the first time. Is the US heading for a crisis?

America’s national debt is approaching a historic milestone, raising urgent questions about who ultimately bears the cost. When Donald Trump returned to the White House, reducing government waste and cutting the federal deficit became key pillars of his economic agenda. The administration launched DOGE, with ambitious plans to slash spending and improve fiscal discipline. Yet as debt levels continue to climb, economists, investors, and policymakers are debating the long-term consequences for taxpayers, government spending, interest rates, and economic growth.

America’s debt clock is running faster

For the first time in US history, the nation’s gross national debt has exceeded $37 trillion, according to a new report from the US Treasury Department. The national debt stood at $37,004,817,625,842.56 on the afternoon of August 12, a stark reminder of the accelerating pace at which the US government is borrowing. This milestone was reached less than eight months after the country hit the $36 trillion mark in November 2024 and just over a year after surpassing $35 trillion in July 2024.The speed of this debt accumulation has raised alarms among economists and fiscal experts. Michael Peterson, CEO of the Peter G. Peterson Foundation, told AP that the US is now adding $1 trillion to its national debt every five months, a rate more than twice as fast as the average pace over the last quarter-century. This rapid growth is primarily attributed to pandemic-related spending and recent tax cuts and government spending approved by Congress earlier this year under the Trump administration.<h2>Impact on the economy and future generations</h2>The surge in national debt has broad implications for the US economy. As the federal government borrows more, interest rates are pushed higher, raising borrowing costs for everyday Americans on mortgages, car loans, and credit cards. Additionally, businesses face higher borrowing costs, leading to reduced investment and potentially lower wages. The Government Accountability Office has also warned that rising debt could lead to more expensive goods and services. Some experts highlighted the long-term consequences of the Republicans’ tax law, which is expected to add $4.1 trillion to the debt over the next decade.&nbsp;<h2>Policymakers urged to act before crisis hits</h2>Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), urged policymakers to take immediate action to tackle the growing debt. “This milestone should serve as a wake-up call for lawmakers,” she told AP. “We’re on track to spend $1 trillion just on interest costs. The fiscal situation is unsustainable.” Despite the grim reality, experts emphasise that it’s not too late for reform. However, with debt now greater than the combined economies of the Eurozone and China, the window for meaningful action is closing rapidly.&nbsp;(With inputs from agencies)

This rapid growth in the US national debt is primarily attributed to pandemic-related spending and recent tax cuts and government spending approved by Congress earlier this year under the Trump administration.

For the first time in US history, the nation’s gross national debt has exceeded $37 trillion, according to a new report from the US Treasury Department. The national debt stood at $37,004,817,625,842.56 on the afternoon of August 12, a stark reminder of the accelerating pace at which the US government is borrowing. This milestone was reached less than eight months after the country hit the $36 trillion mark in November 2024 and just over a year after surpassing $35 trillion in July 2024. The speed of this debt accumulation has raised alarms among economists and fiscal experts. Michael Peterson, CEO of the Peter G. Peterson Foundation, told AP that the US is now adding $1 trillion to its national debt every five months, a rate more than twice as fast as the average pace over the last quarter-century. This rapid growth is primarily attributed to pandemic-related spending and recent tax cuts and government spending approved by Congress earlier this year under the Trump administration. Impact on the economy and future generations The surge in national debt has broad implications for the US economy. As the federal government borrows more, interest rates are pushed higher, raising borrowing costs for everyday Americans on mortgages, car loans, and credit cards. Additionally, businesses face higher borrowing costs, leading to reduced investment and potentially lower wages. The Government Accountability Office has also warned that rising debt could lead to more expensive goods and services. Some experts highlighted the long-term consequences of the Republicans’ tax law, which is expected to add $4.1 trillion to the debt over the next decade. Policymakers urged to act before crisis hits Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), urged policymakers to take immediate action to tackle the growing debt. “This milestone should serve as a wake-up call for lawmakers,” she told AP. “We’re on track to spend $1 trillion just on interest costs. The fiscal situation is unsustainable.” Despite the grim reality, experts emphasise that it’s not too late for reform. However, with debt now greater than the combined economies of the Eurozone and China, the window for meaningful action is closing rapidly. (With inputs from agencies)

This rapid growth in the US national debt is primarily attributed to pandemic-related spending and recent tax cuts and government spending approved by Congress earlier this year under the Trump administration.

US national debt surpasses $37 trillion, marking a historic milestone

Elon Musk has sounded the alarm on America's rising national debt. At a recent All-In summit hosted by the 'All-In Podcast,' the billionaire, who recently became the first person to boast 200 million followers on his social media platform X, warned, "America is going bankrupt extremely quickly, and everyone seems to be sort of whistling past the graveyard on this one."

Musk has been vocal about America's economic challenges. The concerns centre around the nation's rising national debt and interest payments. Musk shared a headline in July that read, "Interest payments on US national debt will shatter trillions this year, eating 76 per cent of all income taxes collected." Musk added, "America is going bankrupt btw."

According to Musk, the trillion dollars added to debt will pass through generations, forcing the kids and grandkids to pay the debt owed by the current government.

This begs the question: Can a country really go bankrupt? The answer is complicated since a federal government cannot file for Chapter 11 bankruptcy. Congress eventually has to decide to let the government default on its debt, or it can keep borrowing.

Many economists worry about uncontrolled inflation if the government continues to print money to meet its demands. The nonpartisan Peter G. Peterson Foundation claims that growing debt has an impact on the economy in several ways, including less confidence in the government's ability to repay debt, which would discourage private investment, and higher expenditure on interest payments that results in less money being invested in public infrastructure and economic growth.

Meanwhile, Republican nominee Donald Trump endorsed Elon Musk as the 'cost-cutter' in his cabinet. However, Trump acknowledged that Musk wouldn't be available for the full-time role.

The debate on rising debt rages on as presidential elections loom.

Elon Musk has sounded the alarm on America's rising national debt. At a recent All-In summit hosted by the 'All-In Podcast,' the billionaire, who recently became the first person to boast 200 million followers on his social media platform X, warned, "America is going bankrupt extremely quickly, and everyone seems to be sort of whistling past the graveyard on this one.

Elon Musk has sounded the alarm on America's rising national debt. At a recent All-In summit hosted by the 'All-In Podcast,' the billionaire, who recently became the first person to boast 200 million followers on his social media platform X, warned, "America is going bankrupt extremely quickly, and everyone seems to be sort of whistling past the graveyard on this one." Musk has been vocal about America's economic challenges. The concerns centre around the nation's rising national debt and interest payments. Musk shared a headline in July that read, "Interest payments on US national debt will shatter trillions this year, eating 76 per cent of all income taxes collected." Musk added, "America is going bankrupt btw." According to Musk, the trillion dollars added to debt will pass through generations, forcing the kids and grandkids to pay the debt owed by the current government. This begs the question: Can a country really go bankrupt? The answer is complicated since a federal government cannot file for Chapter 11 bankruptcy. Congress eventually has to decide to let the government default on its debt, or it can keep borrowing. Many economists worry about uncontrolled inflation if the government continues to print money to meet its demands. The nonpartisan Peter G. Peterson Foundation claims that growing debt has an impact on the economy in several ways, including less confidence in the government's ability to repay debt, which would discourage private investment, and higher expenditure on interest payments that results in less money being invested in public infrastructure and economic growth. Meanwhile, Republican nominee Donald Trump endorsed Elon Musk as the 'cost-cutter' in his cabinet. However, Trump acknowledged that Musk wouldn't be available for the full-time role. The debate on rising debt rages on as presidential elections loom.

Is the US going bankrupt? Elon Musk raises alarms on rising national debt

us-national-debt

Us National Debt, News on Us National Debt, stories on Us National Debt, articles on Us National Debt, Us National Debt stories at Wion, Us National Debt news, Us National Debt latest news

us national-debt

Trump’s Fiscal Promise Under Pressure: US Debt Surpasses $40 Trillion | Deficit And Borrowing Rise

America's debt hits a staggering $40 trillion. Is the US heading for a crisis?

America’s debt clock is running faster

US national debt surpasses $37 trillion, marking a historic milestone

Is the US going bankrupt? Elon Musk raises alarms on rising national debt