The US national debt has ballooned by $658 billion since July 1, pushing the gross figure past the $40 trillion mark for the first time in history. This milestone was reached on August 18.
During this period, the government has been adding roughly $8 billion to $9 billion in debt daily. The gross national debt reached $40.05 trillion on August 18, up from approximately $39.4 trillion at the end of June. Meanwhile, debt held by the public stood at roughly $32.0 to $32.2 trillion. The total federal deficit for fiscal year 2026 reached $1.8 trillion through July, marking a 4% increase compared to the same point in the previous year.
Net interest payments climbed by $117 billion year-over-year, representing a 14% increase. Interest on the national debt now competes with defense spending and Medicare for the title of largest federal expense. Overall, the national debt has more than doubled compared to a decade ago.
Mandatory spending programs, primarily Social Security and Medicaid, account for the largest share of federal outlays. Both the Congressional Budget Office and the Bipartisan Policy Center have flagged the current trajectory as unsustainable, projecting continued debt growth barring significant policy changes.
As Treasury issuance increases to fund the deficit, the growing supply of government bonds can push yields higher, raising borrowing costs across the financial system for corporations, homebuyers, and consumers. Higher risk-free yields also alter the competitive landscape for investment returns by making riskier assets less attractive relative to government bonds.
