NEW YORK — The US national debt has exceeded $40tn. The US is nearing its $41.1tn debt ceiling, a statutory limit that restricts further borrowing by the federal government.

According to the Congress Joint Economic Committee, US national debt is rising by about $90,000 every second. This accumulation translates to an increase of $7.8bn a day, reflecting the sustained pace of federal borrowing.

The composition of this debt includes $32.27 trillion held by the public and $7.78 trillion owed between government accounts. The US government borrowed $1.8 trillion in the first ten months of this fiscal year, which is more than it borrowed in the whole of the last fiscal year.

US national debt stood at just under $20tn at the beginning of Donald Trump's first presidential term in 2016. Since then, US national debt has doubled in the decade since 2016, representing a 100% increase from the $20 trillion level to the current $40 trillion threshold.

Interest payments on US government debt are 15% higher than the same period last year, according to Mohamed A. El-Erian, an economist and a professor at the Wharton School. These interest payments on US government debt are almost 20% of tax revenue, according to El-Erian.

"What happens when interest rates go up is that the funding of the deficit becomes more expensive," El-Erian said. He noted that the current trajectory serves as a warning sign rather than an immediate crisis.

"We're getting to a point where it's a flashing yellow light. It's not a flashing red light," El-Erian said. He added that political discussions remain focused on other priorities rather than deficit reduction.

Eric Swanson, a professor of economics at University of California and former senior economist at the Federal Reserve, pointed to the role of interest rates in the current fiscal environment. "What's very different now compared to a decade ago is the level of interest rates," Swanson said.

"Long-term interest rates in the US are at multi-decade highs - part of that is concerns about inflation, but part of that is concerns about the extreme levels of US government borrowing," Swanson said. These factors contribute to the increasing cost of servicing the national debt.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, drew parallels to historical warnings about debt levels. "At that time, President [Ronald] Reagan told the nation in a televised address, 'If we as a nation needed a warning, let that be it'," MacGuineas said.

She contrasted past debt levels with current expenditures on interest. "Jumping to America's 250th year, we are spending more than that just on interest payments on our debt," MacGuineas said.

US national debt is 126% compared with the size of the economy. Looking ahead, US debt is forecast to climb to about $64tn by 2036, according to the Congressional Budget Office. This projection represents a 55.7% rise from the current $41.10 trillion debt ceiling level.

Timeline

On October 24, 2024, the ETAAC Notice of Public Meeting: Correction was issued. This document contains a correction to a meeting announcement for a Public Meeting of the Electronic Tax Administration Advisory Committee (ETAAC). The meeting will be held Thursday, November 14, at 12:30.

The prior notice, that was published in the Federal Register was published on October 24, 2024, incorrectly stated November 14 was a Wednesday. By 2036, US debt is forecast to climb to about $64tn by 2036, according to the Congressional Budget Office.

What's New

Later reporting clarifies the structure of the outstanding obligations. The US national debt splits into $32.27 trillion held by the public and $7.78 trillion owed between government accounts.

Additional data shows the recent acceleration in borrowing.

Why It Matters

The approach to the $41.1tn debt ceiling creates a potential constraint on federal operations if the limit is reached without legislative action. With debt rising by $7.8bn a day, the window for addressing the ceiling narrows as total obligations grow.

Interest costs consuming nearly 20% of tax revenue reduce the fiscal space available for other government programs or investments. The forecast of $64tn in debt by 2036 suggests that without changes to borrowing or revenue patterns, the debt burden will continue to expand relative to the economy.