What the nation’s $40 trillion debt means for you

WASHINGTON —

The U.S. national debt has reached $40 trillion, a financial milestone that experts warn could lead to higher borrowing costs for Americans.

Data from the Get the Facts Team shows that, in the past decade, the total national debt has grown about 112%. Since 2000, it’s grown nearly 600%.

As it stands, the national debt divvies out to about $116,800 in debt per American, based on current population numbers from the Census Bureau.

Brett Loper of the Peter G. Peterson Foundation says the main reason why debt has accelerated so fast is because of interest.

“Something like 60 cents of every dollar that we borrow is currently going just to pay interest on the debt,” Loper said. “The increasing cost of our debt and the growing debt at the same time is really the most critical feature of why we’ve doubled from $20 to $40 trillion over the course of the last 10 years.”

The bond market, where investors loan money to the U.S. government, is feeling the pressure.

As the national debt grows, investors demand higher payouts for the risk of lending out the money, causing bond yields — the interest the government pays — to rise. Loper says bond yields act as a benchmark for almost all other consumer debt, including mortgage rates, auto loans and credit cards.

Bottom line, when the government pays more to borrow, you’ll likely be paying more too.

When asked how the administration plans to address the issue Thursday, Treasury Secretary Scott Bessent suggested tariffs as a potential solution.

“The $40 trillion is a big number. It is smaller when we look at the publicly traded amount because our Social Security funds and other government entities hold a substantial amount,” Bessent told reporters. “What we’re going to do, we’re going to have to grow our way out of this.”

But Loper says the growing debt problem has persisted regardless of which political party or president is in charge. Addressing it, experts say, may require Congress to cut spending and potentially raise taxes.

Meanwhile, the Committee for a Responsible Federal Budget compared the debt between the Trump and Biden administrations. The report found that under President Donald Trump’s first term, an approved $4.8 trillion in non-COVID-19-related debt was added, while former President Joe Biden approved $2.2 trillion. The report also highlighted that 77% of Trump’s debt came from bipartisan legislation, compared to 29% under Biden.

In an effort to calm the bond market, the government said Wednesday it would shift toward more short-term borrowing to reduce the supply of long-term debt to help lower interest rates on long-term borrowing.

However, experts caution that this is only a temporary fix and does not address underlying spending issues that contribute to the national debt.

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