US debt crosses USD40trn threshold after doubling under Trump and Biden

Total US debt has now passed the USD 40 trillion mark, Business Recorder reported, citing a Treasury Department release issued Wednesday. The Treasury's daily figures put the total at USD 40.047 trillion as of Tuesday, including USD 32.266 trillion held by the public and USD 7.782 trillion held within government agencies. It has more than doubled since January 2017, when Donald Trump took office with debt at USD 19.95 trillion.

Budget watchdogs had anticipated the crossing for weeks, and some warned that a full debt crisis could erupt unless lawmakers either increase taxes or reduce spending, or do both. Margaret Spellings of the Bipartisan Policy Centre said federal programmes are spending well beyond what the government takes in. Roughly one-third of the increase came from pandemic borrowing under Trump and Biden, with other tax and spending gaps accounting for the rest.

On Tuesday, yields on long-dated bonds rose to levels last seen almost two decades ago, as investors sought higher compensation. On Wednesday, Treasury Secretary Scott Bessent said buybacks of 10- to 30-year Treasuries would be doubled, with each operation now at least USD 4 billion. The Treasury also reported a July deficit of USD 432 billion, the fourth-highest monthly gap in US history.