The national debt surpassed a record $40 trillion, a staggering milestone as defense costs, social programmes like Social Security and Medicare and interest on the burgeoning deficit make up an enormous share of federal spending.
The milestone figure was recorded just five months after the US hit a record $39 trillion debt in March. It reached $38 trillion five months before that, in October.
The unprecedented $40 trillion figure highlights competing administration priorities, from boosting defense spending that the US relies on to carry out President Donald Trump’s almost-6-month-old war in Iran to lowering the cost of gas and groceries.
Kush Desai, a White House spokesman, said the Trump administration “has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America’s debt-to-GDP ratio trending in the right direction.”
However, experts say the exploding debt and the latest record milestone are already affecting Americans’ pocketbooks by raising borrowing costs for things like mortgages and cars, lowering wages from businesses that have less money available to invest, and creating more expensive goods and services.
“If we want to improve our living standards, today and for the next generation, now is the time for lawmakers to put our nation on a more affordable and sustainable path,” says Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a think tank focused on US fiscal challenges.
The debt has exploded over several presidential administrations, as the nation’s leaders spend more money than it collects in taxes. In recent memory, the multi-year COVID-19 pandemic shut down much of the US economy, where the federal government borrowed heavily during President Trump’s first term and under former President Joe Biden to stabilise the economy and support a recovery.
More government spending was approved after Trump signed Republicans’ tax cut and spending legislation into law last year.
