WASHINGTON, D.C. / RankWire.AI / – U.S. gross national debt has surpassed $40 trillion, marking a new high for federal borrowing. U.S. Treasury data showed the total reaching $40.047 trillion on Aug. 18. By Aug. 27, the figure had climbed to about $40.078 trillion. Debt held by the public accounted for roughly $32.314 trillion, while government accounts held about $7.764 trillion.
The milestone came less than five months after federal debt crossed $39 trillion in March. Gross national debt stood near $19.5 trillion in August 2016, about half its current level. Washington adds to the debt when federal spending exceeds revenue. The government covers those annual shortfalls largely by issuing Treasury bills, notes and bonds to investors and government accounts.
Federal finances remain under pressure from large annual budget gaps. The Congressional Budget Office reported a $1.8 trillion deficit for the first 10 months of fiscal 2026. That amount was $169 billion above the comparable period in fiscal 2025. Revenue increased by $139 billion, or 3%, while federal outlays rose by $308 billion, or 5%. The agency estimates the full-year deficit will reach about $2.1 trillion.
Federal interest costs exceed $1 trillion
Interest expenses now take a larger share of the federal budget. Net interest spending is projected to exceed $1 trillion in fiscal 2026, up from about $970 billion in 2025. That equals roughly 3.3% of U.S. gross domestic product. Current projections show annual net interest costs reaching $2.1 trillion by 2036. At that point, those payments would equal about 4.6% of GDP.
Debt held by the public has also climbed relative to the size of the U.S. economy. Current projections place that measure at about 101% of GDP in 2026. It is projected to reach 120% by 2036. The previous historical peak was 106% in 1946, following World War II. Under the same baseline, publicly held debt approaches $56 trillion by 2036, while gross federal debt nears $64 trillion.
Debt burden affects borrowing and investment
Heavy federal borrowing also influences financial conditions across the economy. The Congressional Budget Office has found that increased government borrowing can raise interest rates and reduce private investment over time. Businesses then have less capital available for expansion and productivity gains. Those effects can also influence worker compensation and household income. Mortgage rates, auto loans and other consumer credit depend on many factors, including broader interest-rate conditions.
Gross national debt and the federal deficit measure different parts of the government’s fiscal position. The debt records accumulated federal obligations, while the deficit tracks the yearly gap between spending and revenue. Both remain elevated in fiscal 2026. Gross debt has moved above $40 trillion, while the annual deficit is estimated at $2.1 trillion. That deficit equals about 5.8% of GDP, compared with a 50-year average of roughly 3.8%.