Washington: The national debt surpassed a record USD 40 trillion on Wednesday, a staggering milestone as defense costs, social programs like Social Security and Medicare and interest on the burgeoning deficit to make up an enormous share of federal spending.
The milestone figure was recorded just five months after the US hit a record USD 39 trillion debt in March. It reached USD 38 trillion five months before that, in October.
The unprecedented USD 40 trillion figure highlights competing administration priorities, from boosting the defense spending that the US relies on to carry out President Donald Trump's almost-6-month-old Iran war to lowering the cost of gas and groceries.
Kush Desai, a White House spokesman, said the Trump administration “has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America's debt-to-GDP ratio trending in the right direction.” However, experts say the exploding debt and the latest record milestone is already affecting Americans' pocketbooks by raising borrowing costs for things like mortgages and cars, lowering wages from businesses that have less money available to invest and creating more expensive goods and services.
Advocates for a balanced budget also warn that the long-term trend of borrowing more and paying more in interest will force Americans to face tougher fiscal tradeoffs ahead.
"The federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans' long-term prosperity,” said Margaret Spellings, president and CEO of the Bipartisan Policy Center.
“Our current fiscal trajectory is plainly unsustainable, and that's the best-case scenario. AI disruption, a recession, global war, or any number of other events could quickly push us over the edge from a challenge into a full-blown crisis," Spellings said in a statement.
The US is subject to a statutory debt limit, or a limit to federal borrowing, which Congress has the authority to set, adjust or abolish. The Bipartisan Policy Center estimates that the US will most likely reach the debt limit of USD 41.1 trillion sometime between late winter and mid-summer of 2027, requiring Congress to again vote on whether to raise or suspend the debt limit.
The US' fiscal position stands at the worst among other developed countries, according to recent data analysis from the Organization for Economic Co-operation and Development.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
