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US National Debt Surpasses $40 Trillion Milestone as Borrowing Costs Rise

The US national debt has officially surpassed the $40 trillion milestone, reaching $40.05 trillion as of Tuesday. This significant increase reflects years of heavy spending and borrowing under both the Biden and Trump administrations. The debt has grown much faster in the 2020s than in previous decades, with the public share of the debt nearing 100%. To manage the rising costs, the administration announced a plan to increase buyback operations at the long end of the yield curve to provide liquidity support for longer-term bonds. This move aims to address surging borrowing costs that have impacted consumers through higher interest rates on mortgages and credit cards. While the administration remains optimistic, some economists warn that if left unchecked, the debt could lead to a hyperinflationary environment or a fiscal crisis. The debt-to-GDP ratio is currently 125.8%, one of the highest among the world's largest economies, highlighting the urgency of the fiscal situation.

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