[REVISION HISTORY]

US debt surpasses $40T milestone; fiscal and political rift

Updated 15 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-18 19:11 UTC → 2026-09-20 15:29 UTC · added ~~removed~~

By late August 2026, the U.S. national debt officially surpassed $40 trillion, a milestone following a period where total public debt more than doubled from early 2017 levels. The Congressional Budget Office projects a $1.9 trillion federal deficit for fiscal year 2026, with annual deficits potentially reaching $3.1 trillion by 2036. The 2025 reconciliation law and related debt-service costs are estimated to add an additional $4.7 trillion to projected deficits. Economists attribute this accumulation to sustained budget deficits, pandemic-era spending, rising defense costs, and tax reductions for high earners. Recent data suggests the acceleration toward this $40 trillion threshold was driven by significant expenditures related to the war against Iran and tariff reimbursements. Annual interest payments have exceeded $1 trillion, creating a cycle where the government borrows to service existing debt. This fiscal pressure is compounded by rising yields, with ten-year Treasury yields rising from below 4% at the start of 2026 to 4.6%. As of mid-September 2026, the debt reached approximately $40.047 trillion. Recent reports indicate that annual interest expenditures have surged to an annualized $1.247 trillion, up from $564 billion in 2019. This increase is attributed to high debt levels, inflation, and competition for capital from AI companies in the bond market. Ten-year Treasury yields have continued to climb, approaching 5%. Long-term projections from the Congressional Budget Office suggest debt could reach $64 trillion by 2036, while the Government Accountability Office warns that debt held by the public could reach 251% of GDP by 2056. Jeffrey Gundlach, CEO of DoubleLine Capital, has warned that the next economic downturn could trigger a debt crisis, potentially challenging the assumption that government bonds serve as a safe haven.

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