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# US national debt passes $40 trillion after doubling under Trump and Biden
- URL: https://www.bushletter.com/us-national-debt-passes-40-trillion-after-doubling-under-trump-and-biden/
- Published: 2026-08-20T07:00:00.000Z
- Updated: 2026-08-20T07:44:19.000Z
- Description: On 19 August 2026, the United States Treasury's debt-to-the-penny ledger ticked past a figure that would have seemed almost theoretical a decade ago.
- Author: Editor
- Tags: Finance, US

![Elias Thorne](https://res.cloudinary.com/dz77sb7j1/image/upload/v1774262579/bushletter/authors/elias-thorne.png)

By **Elias Thorne** · 2026-08-20

TLDR

US public debt crossed $40.048 trillion on 19 August 2026, roughly doubling from $19.9 trillion at the start of 2017\. Interest payments alone reached $857 billion in the first nine months of fiscal 2026, up 13 per cent year-on-year. Australian borrowing costs move in step with US Treasury yields, so the trajectory hits local mortgages and business loans.

KEY TAKEAWAYS

01US public debt reached $40.048 trillion on 19 August 2026, per Treasury's debt-to-the-penny data.

02Debt held by the public now exceeds 100 per cent of GDP, about twice the historic average.

03Net interest payments of $857 billion over nine months of fiscal 2026 outpaced many major federal programmes.

04The Congressional Budget Office attributed the 13 per cent interest-cost rise to a larger debt load and higher long-term rates.

05Rising US Treasury yields flow directly into Australian mortgage and business borrowing costs via global benchmark pricing.

## The number that took nine years to double

On 19 August 2026, the United States Treasury's debt-to-the-penny ledger ticked past a figure that would have seemed almost theoretical a decade ago. Total US public debt outstanding reached $40.048 trillion that day, a number that concentrates the mind not because of the round figure but because of the speed at which the final digits accumulated.[\[1\]](https://api.fiscaldata.treasury.gov/services/api/fiscal%5Fservice/v2/accounting/od/debt%5Fto%5Fpenny?filter=record%5Fdate:eq:2026-08-19&ref=bushletter.com) Each successive trillion has arrived faster than the last, as structural deficits compound with rising interest costs.

The doubling is the clearest way to grasp the scale of the shift. When Donald Trump was inaugurated in January 2017, total public debt stood at $19.937 trillion.[\[2\]](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F201701.pdf?ref=bushletter.com) By the time he left office four years later it had climbed to $27.785 trillion.[\[3\]](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F202101.pdf?ref=bushletter.com) The Biden administration then added another rung: by January 2022 alone the total had crossed $30 trillion.[\[4\]](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F202202.pdf?ref=bushletter.com) The arithmetic distributes blame across two presidencies and multiple Congresses, none of whom found a sustainable path back to surplus.

## A debt load larger than the economy

Debt held by the public reached 100.2 per cent of GDP as of 31 March 2026, according to the Committee for a Responsible Federal Budget, placing it at roughly twice the historic average.[\[5\]](https://www.crfb.org/press-releases/debt-reaches-100-gdp?ref=bushletter.com) Maya MacGuineas, President of the Committee for a Responsible Federal Budget, said the national debt is now larger than the US economy, at about twice the historic average.[\[5\]](https://www.crfb.org/press-releases/debt-reaches-100-gdp?ref=bushletter.com) That ratio matters because it determines how much of future national income must be pledged to creditors rather than spent on goods, services or investment.

The United States has financed its operations through Treasury securities since the country's founding. Public debt consists of marketable securities sold to investors, while intragovernmental holdings reflect amounts that government trust funds have invested in Treasury obligations. Both components have grown, but it is the publicly held portion, owned by domestic and foreign investors, central banks and sovereign wealth funds, that sets global borrowing benchmarks.

## The bill that crowds everything else out

What has changed most sharply in recent years is the cost of carrying the debt, not just its size. Net interest on the public debt in the first nine months of fiscal 2026 reached $857 billion, up $98 billion or 13 per cent from the same period in fiscal 2025, according to the Congressional Budget Office.[\[6\]](https://www.cbo.gov/system/files/2026-07/61982-MBR.pdf?ref=bushletter.com) That figure exceeded what the federal government spent on many individual discretionary programmes over the same period, making interest a spending line that now competes directly with defence outlays, Medicare and domestic discretionary spending.

The Congressional Budget Office attributed the cost rise to a larger debt load and higher long-term interest rates.[\[6\]](https://www.cbo.gov/system/files/2026-07/61982-MBR.pdf?ref=bushletter.com) That pairing is the self-reinforcing mechanism at the heart of fiscal deterioration: a larger stock of debt requires more refinancing at whatever rate the market demands, and when those rates are elevated the interest bill rises faster than the underlying deficit would suggest. Successive Congresses have raised or suspended the statutory debt limit rather than constrain spending or raise revenue, allowing the cycle to continue.

The composition of federal spending has shifted visibly as interest costs have grown. Outlays for entitlement programmes such as Social Security and Medicare are driven by demographic and statutory formula and cannot easily be compressed in the short term. Discretionary programmes, covering defence, infrastructure, research and education, bear the adjustment when interest payments consume a growing share of revenues.

## Why the speed of the last trillion matters

The jump from $19.937 trillion in January 2017 to $27.785 trillion in January 2021 represented $7.848 trillion added over four years, including the extraordinary pandemic spending of 2020.[\[2\]](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F201701.pdf?ref=bushletter.com)[\[3\]](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F202101.pdf?ref=bushletter.com) The further climb from $27.785 trillion to $40.048 trillion, roughly $12.3 trillion, has occurred in less than six years, with the pace accelerating as interest compounding adds to the structural deficit. There is no mechanical ceiling on that trajectory: the debt limit is a legislative artefact that Congress controls, not a genuine fiscal constraint.

The political economy of fiscal consolidation remains unfavourable. Spending cuts large enough to stabilise the debt-to-GDP ratio would require reducing entitlement growth or defence, both politically toxic. Revenue increases of similar magnitude face equivalent resistance, and without a shift in one or both the CBO's own projections point to continued deterioration across multiple forecast horizons.

## The Australian transmission channel

For Australian households and businesses, the US debt trajectory is not an abstraction. US Treasury yields serve as the global benchmark for borrowing costs: when those yields rise, the price of money rises everywhere that integrates with global capital markets, and Australia is deeply integrated.[\[5\]](https://www.crfb.org/press-releases/debt-reaches-100-gdp?ref=bushletter.com)

Australian bank funding costs track movements in US Treasuries with a lag, because Australian banks raise a material share of their wholesale funding in offshore markets priced against those benchmarks. When Treasury yields move higher, as they have as the US debt load and refinancing needs have grown, the spread paid by Australian lenders on new bond issuance widens. That cost eventually passes through to the mortgage and business loan rates that consumers and companies pay domestically.

The Reserve Bank of Australia sets the cash rate, but it does not control the term premium embedded in fixed-rate mortgages or the pricing of corporate debt, both of which reference global benchmarks. A sustained rise in US Treasury yields driven by the scale and pace of US federal borrowing exerts persistent upward pressure on Australian borrowing costs that the RBA cannot fully offset by holding its own rate steady. The Congressional Budget Office recorded $857 billion in net interest payments across the first nine months of fiscal 2026, and that bill is still growing.

This article contains analysis and commentary on market conditions. It does not constitute financial, investment, or professional advice. Past performance is not indicative of future results. Always consult a qualified adviser before making financial decisions.

SOURCES & CITATIONS

1. [US Treasury Debt to the Penny, 19 August 2026](https://api.fiscaldata.treasury.gov/services/api/fiscal%5Fservice/v2/accounting/od/debt%5Fto%5Fpenny?filter=record%5Fdate:eq:2026-08-19&ref=bushletter.com)
2. [Monthly Statement of the Public Debt, January 2017](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F201701.pdf?ref=bushletter.com)
3. [Monthly Statement of the Public Debt, January 2021](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F202101.pdf?ref=bushletter.com)
4. [Monthly Statement of the Public Debt, January 2022](https://fiscaldata.treasury.gov/static-data/published-reports/mspd-entire/MonthlyStatementPublicDebt%5FEntire%5F202202.pdf?ref=bushletter.com)
5. [Debt Reaches 100% of GDP, Committee for a Responsible Federal Budget](https://www.crfb.org/press-releases/debt-reaches-100-gdp?ref=bushletter.com)
6. [CBO Monthly Budget Review, July 2026](https://www.cbo.gov/system/files/2026-07/61982-MBR.pdf?ref=bushletter.com)

FREQUENTLY ASKED QUESTIONS

When did US public debt cross $40 trillion?

Treasury's debt-to-the-penny data shows total US public debt outstanding reached $40.048 trillion on 19 August 2026.

How fast did US debt double?

Debt stood at $19.937 trillion in January 2017 and reached $40.048 trillion in August 2026, roughly doubling over nine and a half years across two presidencies.

How much is the US paying in interest on its debt?

The Congressional Budget Office recorded $857 billion in net interest payments in the first nine months of fiscal 2026, up 13 per cent on the same period a year earlier.

Why does US debt matter for Australian mortgage rates?

US Treasury yields set the global benchmark for borrowing costs. Australian banks raise wholesale funding in offshore markets priced against those yields, so rising US rates flow through into local mortgage and business loan pricing.

Is US debt larger than the US economy?

Yes. Debt held by the public reached 100.2 per cent of GDP as of 31 March 2026, according to the Committee for a Responsible Federal Budget, placing it at roughly twice the historic average.

![Elias Thorne](https://res.cloudinary.com/dz77sb7j1/image/upload/v1774262579/bushletter/authors/elias-thorne.png)

[Elias Thorne](https://bushletter.com/author/elias-thorne/?ref=bushletter.com)

Elias Thorne writes about interest rates, the bond market and the Reserve Bank. He is interested in what monetary policy actually does to household budgets, and in the long stretches of economic history that tend to repeat.