The United States national debt has exceeded $40 trillion for the first time, doubling from roughly $20 trillion in January 2017. The milestone arrived months earlier than expected, with Treasury figures cited by RT putting the burden at around $119,000 for every American — and more than $366,000 for every federal taxpayer.
INR Report: Based on reporting by RT HERE.
The United States has crossed a financial threshold that would have been almost unimaginable only a generation ago: US$40 trillion in federal debt.
According to Treasury Department figures cited by RT, total outstanding federal debt reached approximately $40.05 trillion, passing the milestone several months earlier than had been expected.
Perhaps more striking is the speed at which the latest trillion dollars was accumulated.
US debt has reportedly increased by around $1 trillion since March alone.
For perspective, RT notes that it took the United States nearly two centuries to accumulate its first trillion dollars of national debt, finally reaching that level in 1981.
Today, Washington can add an equivalent amount in a matter of months.
Debt Has Doubled Since 2017
The longer-term trajectory is equally significant.
US federal debt stood at approximately $20 trillion in January 2017. Less than a decade later, it has doubled.
The headline $40 trillion figure represents roughly $119,000 for every person in the United States, according to the calculations cited in the report.
Measured against federal taxpayers rather than the total population, the figure rises to more than $366,000 per taxpayer.
Those numbers do not mean individuals personally owe the Treasury that amount. They illustrate the scale of federal liabilities relative to the population supporting the government's tax base.
The underlying mechanism is straightforward.
When the US federal government spends more than it receives through taxation and other revenue, it runs a budget deficit. The Treasury finances that shortfall through additional borrowing.
Successive annual deficits therefore accumulate into the national debt.
Spending Across Successive Administrations
The increase cannot reasonably be attributed to a single administration.
Debt rose substantially during Donald Trump's first presidency and continued climbing under Joe Biden, with both periods involving major government expenditure and persistent fiscal deficits.
The Covid-19 pandemic produced particularly large increases as Washington borrowed trillions of dollars to finance emergency relief programmes and support the economy.
But emergency pandemic spending is only part of the explanation.
Long-term mandatory programmes including Social Security and Medicare represent major components of federal expenditure, while tax reductions enacted by successive administrations have reduced government revenue without equivalent reductions in spending.
The difference has increasingly been financed through borrowing.
Military Commitments Add to the Bill
Military expenditure has added further pressure.
RT reports that Washington has spent approximately $195 billion on Ukraine-related assistance since the escalation of the Russia-Ukraine conflict in 2022.
That figure reportedly includes weapons, direct military support and expenditure required to replenish American military inventories.
The more recent conflict involving Iran has created another unexpected expense.
US Defense Secretary Pete Hegseth said in July that the Iran conflict had cost Washington approximately $37.5 billion, although RT reports that the eventual cost could be substantially higher.
Whatever position is taken on the strategic justification for those commitments, they ultimately have to be financed.
When expenditure is not matched by existing federal revenue, that financing contributes to deficits and ultimately to debt.
The Trillion-Dollar Interest Bill
There is another increasingly important dimension to America's debt problem.
The debt itself now costs enormous amounts of money to maintain.
As total borrowing has increased while interest rates have risen, annual federal interest payments have climbed above $1 trillion.
That means debt servicing has itself become one of the largest items in the US federal budget.
This creates a potentially difficult fiscal feedback loop.
More debt produces larger interest payments. Larger interest payments increase federal expenditure. Unless government revenue rises or spending elsewhere falls sufficiently, those additional costs can contribute to still larger deficits and further borrowing.
The issue is therefore no longer simply the headline size of the debt.
Increasingly, it is the cost of carrying it.
Who Owns $40 Trillion of US Debt?
The $40 trillion figure is also frequently misunderstood.
It does not represent $40 trillion owed entirely to foreign governments.
According to the figures cited by RT, approximately $32.3 trillion is debt held by the public, while about $7.8 trillion represents obligations between different federal government accounts.
Most publicly held US debt is owned domestically.
Pension funds, mutual funds, banks, businesses, individuals and the Federal Reserve all hold US Treasury securities.
Foreign investors and governments nevertheless hold trillions of dollars of Treasuries, with Japan, the United Kingdom and China among the largest overseas holders cited in the report.
This extensive market for Treasury securities is one reason the United States has historically been able to finance extraordinarily large deficits.
The crucial question is what happens if the amount investors demand to lend Washington money continues rising.
Why $40 Trillion Matters
There is no automatic financial cliff at precisely $40 trillion.
Crossing the threshold does not by itself mean the United States is insolvent, nor does it mean an immediate debt crisis is inevitable.
The United States issues debt in its own currency and sits at the centre of the global financial system. US Treasury securities remain fundamental assets throughout international markets.
But the trajectory matters.
A government whose economy and tax revenues are growing can sustain more nominal debt than it could decades earlier.
The more revealing measures therefore include debt relative to GDP, the federal deficit, interest costs relative to government revenue, and the rate at which debt is accumulating.
The fact that the $40 trillion milestone arrived earlier than forecast indicates that borrowing is continuing at considerable speed.
And once interest expenditure itself exceeds $1 trillion annually, maintaining the existing debt becomes an increasingly significant claim on future federal revenue.
Does This Affect New Zealand?
Yes — because the United States is not simply another heavily indebted country.
It remains the issuer of the world's dominant reserve currency and US Treasury securities form a foundation of the global financial system.
Changes in American borrowing requirements and Treasury yields can therefore influence international interest rates, bond markets, currencies and investment flows.
That matters to New Zealand.
If enormous US government borrowing contributes to sustained upward pressure on Treasury yields, international investors may demand higher returns elsewhere as well. Those global financing conditions can eventually influence New Zealand government borrowing, corporate funding and mortgage rates.
The exchange rate is another potential transmission mechanism.
New Zealand imports substantial quantities of goods, machinery, fuel and technology priced directly or indirectly in US dollars. Major changes in confidence toward the US dollar or international capital markets can therefore feed into the NZ dollar and domestic import costs.
There is also a broader lesson for New Zealand fiscal policy.
The US experience demonstrates how difficult structural deficits become once they persist across successive governments. Borrowing accumulated to solve today's political or economic problem becomes tomorrow's interest expense.
That does not mean New Zealand faces anything approaching America's $40 trillion debt burden.
But the underlying arithmetic is universal.
Governments can borrow during emergencies, recessions and periods of major investment. The critical question is whether the resulting debt supports future productive capacity — or simply leaves future taxpayers financing yesterday's expenditure.
America reaching $40 trillion is therefore more than a symbolic milestone.
The number itself is extraordinary.
The speed at which it is increasing may be more important.
Source
RT, 21 August 2026
US debt tops $40 trillion months earlier than expected
Primary figures cited by RT: US Treasury Department
Independent reporting. Original context. Credited sources.