US national debt crossed a record $40 trillion, and one expert warns what might push the country into ‘a full-blown crisis’

The United States national debt officially crossed the $40 trillion mark on Wednesday, marking a massive milestone that highlights the country’s ongoing fiscal challenges, the Associated Press reported. This record comes just five months after the debt hit $39 trillion in March, following a similar jump from $38 trillion in October.

The national debt has been growing across several presidential administrations, driven by a cycle where the government consistently spends more than it brings in through tax revenue. We saw a significant increase in borrowing during the COVID-19 pandemic, as the federal government sought to stabilize the economy and support a recovery during President Trump’s first term and under former President Joe Biden. More recently, the debt grew further after President Trump signed Republicans’ tax cut and spending legislation into law last year.

Right now, the federal government is balancing several competing priorities. These include boosting defense spending, which is currently tied to President Donald Trump’s almost-6-month-old war in Iran, alongside efforts to lower the cost of gas and groceries. Other major factors driving this spending include Social Security, Medicare, and the growing interest payments on the deficit itself.

Many experts are concerned about the long-term health of the economy and the impact on everyday Americans

Kush Desai, a White House spokesman, said the Trump administration “has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America’s debt-to-GDP ratio trending in the right direction.”

Experts point out that this level of borrowing is making it more expensive to take out loans for cars and mortgages. It also impacts wages because businesses have less capital available to invest, which leads to higher prices for goods and services. The Bipartisan Policy Center estimates that the U.S. will likely hit the $41.1 trillion debt limit sometime between late winter and mid-summer of 2027. When that happens, Congress will once again have to decide whether to raise or suspend the statutory debt limit.

The situation is becoming increasingly difficult to ignore. Margaret Spellings, president and CEO of the Bipartisan Policy Center, noted that the current path is creating real problems for the average person. “The federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity,” she said.

Spellings also warned about the potential for future instability, adding, “Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario. AI disruption, a recession, global war, or any number of other events could quickly push us over the edge from a challenge into a full-blown crisis.”

According to data analysis from the Organization for Economic Co-operation and Development, the U.S. currently holds the worst fiscal position among developed countries. Michael A. Peterson, CEO of the Peter G. Peterson Foundation, believes it is time for a change in course. “If we want to improve our living standards, today and for the next generation, now is the time for lawmakers to put our nation on a more affordable and sustainable path,” he says.