Gross National Debt Reaches $40 Trillion

The gross national debt of the United States officially reached $40 trillion for the first time yesterday, according to the U.S. Treasury. The gross debt reached its previous milestone of $39 trillion in March of this year, less than five months ago. Meanwhile, debt held by the public stands at over $32 trillion.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

The gross national debt has doubled in the last ten years; in less than twenty years, it has quadrupled. And today, we have confirmation that the debt has reached a new milestone of $40 trillion. It is staggering how predictable the fiscal decline of a global power can become.

For perspective, it took nearly 200 years for America’s gross debt to reach $1 trillion for the first time in 1981. At that time, President Reagan told the nation in a televised address, “If we as a nation needed a warning, let that be it.” Jumping to America’s 250th year, we are spending more than that just on interest payments on our debt.

And other warnings signs are flashing too, with debt held by the public recently exceeding the size of our economy, the deficit-to-GDP ratio running twice as high as where it should be, and interest costs exceeding our national defense budget.

$40 trillion of debt doesn’t exist solely on the government’s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another. The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad.

Correcting our fiscal course cannot be done overnight, but the very first step can be accomplished right now: committing to No New Borrowing. From there, lawmakers should urgently agree on a fiscal goal for the nation – targeting 3% deficits to GDP has bipartisan support already – and finally address our long-imperiled trust funds, both of which can be accomplished through a bipartisan fiscal commission.

Whatever motivation our elected officials need to find to finally take action – whether the worries of their constituents back home, the alarm signaled by financial markets, competition from abroad, or the consequences of failing to act – they ought to find it soon. No one knows how many more of these milestone America can take. 

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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.