US public debt surpassed the 40 trillion dollar threshold in August 2026, exceeding the size of the entire national economy. For the first time in American history, annual interest payments on the national debt have crossed the 1 trillion dollar mark, now outpacing defense spending and becoming the second-largest federal budget item after Social Security. The Congressional Budget Office projects that debt held by the public could reach around 120% of GDP by 2036, while the Government Accountability Office envisions a scenario of 251% of GDP by 2056 absent policy reforms. The next breach of the statutory debt limit is expected in mid-to-late 2027. Analysts warn of a vicious cycle where higher deficits push yields higher, which in turn increases interest payments and widens the deficit.
Source: Read the original article
