U.S. total government debt tops $40 trillion for first time

The federal government has topped $40 trillion in total debt for the first time in history, setting a new record for red ink. The Treasury Department announced the ignominious milestone Wednesday, though the mark was crossed a day earlier. Watchdog groups called the figure a flashing warning sign, and urged a wake-up call for Washington. “The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. The U.S. crossed the $30 trillion mark just four years ago, under President Biden, and the $20 trillion mark in 2017, during President Trump’s first term. “It’s shocking that we’ve doubled the federal debt in less than 10 years, and we must change course,” said Michael A. Peterson, CEO of the Peterson Foundation, which tracks spending and debt. The exact debt figure as of Tuesday was $40,047,425,768,420.22. The debt held by the public, which most analysts consider a more important yardstick of fiscal health, stood at about $32.2 trillion. That’s nearly the size of America’s total annual gross domestic product, which stood at about $34 trillion. Crossing the 100% mark has been seen as a red flag moment, with countries that reach that level of debt facing tougher fiscal challenges. Some experts argue that the U.S., with its dollar serving as the chief reserve currency for the world, can withstand debt levels that would be debilitating to other nations. Only once before has the country been at this level of debt, and that was in the wake of World War II — when the borrowed money was used to rescue Europe and eastern Asia from fascism. Once the war ended, much of the debt quickly vanished. By the mid-1950s, it was below 70%, and would dip to the low 30s in the 1970s. It has grown steadily since then, though instead of defeating fascism, it has gone to fund wars in Iraq and Afghanistan and recovery efforts from the 2008 Wall Street collapse and the coronavirus pandemic.