Total U.S. public debt reached $40.05 trillion [1], according to U.S. Treasury Department data reported as of June 30, 2023 [1].
The milestone signals a growing fiscal crisis that economists warn could lead to a "doom loop," where rising interest payments force more borrowing.
This record high follows a period of aggressive growth. The national debt first crossed the $30 trillion mark in January 2022 [1]. Since then, the debt has increased by approximately 33 percent in less than five years [1]. Over a longer horizon, the total debt has more than doubled in under 10 years [5].
Heavy borrowing, increased spending, and tax cuts implemented by both Democratic and Republican administrations have driven the surge. The financial pressure is already impacting the federal budget. According to reported Treasury data, interest costs now exceed national defense spending [11].
Fitch Ratings affirmed a credit rating of AA+ for the U.S. on Aug. 13, 2023 [7]. However, the agency said that the debt ceiling will likely be reached by mid-2027 [8].
"The ceiling will be reached in mid‑2027," Fitch Ratings said [8].
Beyond the government's balance sheet, experts suggest the debt burden is affecting the broader economy. One policy expert said federal debt is already raising the cost of living, and choking out other spending and investment [10].
The scale of the deficit remains high. The federal deficit for July 2023 was $432.3 billion [6].
“Interest costs now exceed national defense spending.”
The crossing of the $40 trillion threshold highlights a structural imbalance in U.S. fiscal policy. When interest payments on existing debt surpass primary expenditures like national defense, the government risks entering a cycle where it must borrow simply to pay interest. This reduces the flexibility of the federal budget to respond to economic shocks or invest in infrastructure without further increasing the deficit.
