The US gross federal debt officially crossed the $40 trillion threshold, landing at approximately $40.05 trillion as of mid-August 2026, putting the debt-to-GDP ratio at roughly 124%, compared to 31.8% in 1980. Federal budget deficits are projected to exceed $1.8 to $2 trillion annually, translating to roughly 6% of GDP being added to the national debt each year. This situation occurs paradoxically with unemployment at 4.1% and solid economic growth, conditions typically associated with wartime economies or deep recessions rather than periods of full employment. The 30-year Treasury yields have pushed toward 5.3%, their highest levels since 2007, and the Congressional Budget Office warns of a vicious feedback loop where higher rates increase interest payments, widen deficits, and require more borrowing.
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