US public debt has reached a record $40 trillion for the first time. The US Treasury Department reported a balance of $40.047 trillion on Tuesday afternoon, marking the highest level in US history. This milestone follows a period where the government deficit doubled over the last decade, with spending growing under both Donald Trump and Joe Biden. The total public debt has surged by a third in less than five years.
The surge is attributed to defense costs, social programs like Social Security and Medicare, tax cuts, and trillions in pandemic spending. These factors have increased the mounting cost of government borrowing and led to rising interest payments on the burgeoning deficit.
This rapid increase in red ink has prompted nervous investors to demand higher interest rates, pushing up borrowing costs for everyone else. Meanwhile, US lawmakers continue to shrug off calls to contend with historically wide fiscal deficits, sparking warnings that a fiscal crisis is brewing.
Reacting to the milestone, the president of the Committee for a Responsible Federal Budget stated that it is staggering how predictable the fiscal decline of a global power can become. Michael Peterson further noted that for anyone who cares about America, democracy, and the future, the current situation is already a crisis.