US Debt Tops $40T as Interest Costs Soar

America just crossed a financial line it's never seen before: the national debt has blown past $40 trillion, the New York Times reports. The government is set to borrow more than $2 trillion this year alone, driven by war spending in Iran, rising costs for major benefit programs, and tax cuts championed by Republicans and signed by President Trump. Roughly half of this year's deficit is now interest on existing debt, prompting one budget hawk to warn of a "debt spiral." The Wall Street Journal notes that while the exact debt figure isn't as important as other figures including the ratio of debt to GDP, "economists broadly agree" the US is on "an unsustainable fiscal trajectory."

Both parties have fueled the red ink over decades, but Trump-era efforts to reverse course are faltering. His tariffs were partly struck down by the Supreme Court, forcing $160 billion in refunds, while tax breaks and war costs are swelling deficits (though Treasury Secretary Scott Bessent insists the tax cuts will pay off with more revenue in the future). The tariff refunds are one reason the national debt crossed the $40 trillion line months earlier than forecasters expected, the Washington Post reports. Investors are responding by demanding higher yields on long-term Treasuries, raising borrowing costs across the economy.