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US national debt passes $40 trillion as interest costs set a record

Interest on the federal debt hit a record through August, and the debt-to-GDP ratio has returned to 100 per cent for the first time in 80 years.

Assembled by Claude from 12 sources at 12 outlets · Monday, September 21, 2026, Morning edition, 10:28 AM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

The US national debt has surpassed $40 trillion for the first time finance.liga.net. Fortune noted the milestone in the context of the Treasury's bond plan, saying the debt had just hit that level fortune.com. Interest payments for the fiscal year could exceed $1 trillion finance.liga.net. By another account, with more than $40 trillion outstanding, annual interest payments have already exceeded $1 trillion nai500.com.

Interest payments on the national debt reached a record high of $1,267,362,000,000 for August kucoin.com. That increases pressure on the federal budget as older low-rate debt rolls into current market rates kucoin.comdailyhodl.com. Interest on the national debt now runs at more than $3 billion a day, and interest payments have nearly tripled since 2020 realclearmarkets.com. The record figure was measured on interest payments on public debt through August dailyhodl.com.

The ratio and the deficit

The US debt-to-GDP ratio has returned to 100 per cent for the first time in 80 years ababnews.com. The historical peak was 106 per cent at the end of the Second World War in 1946, and the Congressional Budget Office expects the ratio to keep climbing ababnews.com. The CBO also expects a federal budget deficit of $2.1 trillion, close to 6 per cent of GDP ua.news.

Goldman Sachs has argued that a growing share of government spending now reflects higher interest payments to investors rather than new spending flowing into the broader economy businessinsider.com. RealClearMarkets framed the position as the product of an earlier Treasury decision, calling it a multi-trillion dollar mistake realclearmarkets.com.

What to watch

Issuance is shifting to the front end. Wall Street expects short-term US Treasury issuance to reach $1 trillion, and one analysis cautioned that large-scale issuance of short-dated debt could itself strain demand techflowpost.com. Fortune reported that the Treasury Secretary's bond plan had already shown markets what will make the department flinch fortune.com.

The debt limit is the near-term political constraint. The Bipartisan Policy Center estimates Washington will run into its debt limit between late winter and mid-summer, so Congress must act inside that window moomoo.com. MarketWatch reported that midterm voters are overwhelmingly worried about the national debt but that only small fixes are expected this year, with any package likely to raise the debt limit again while adding provisions to encourage budget watchdogs marketwatch.com. It described the moment as possibly a last chance for dealmaking marketwatch.com.

Sources

  1. fortune.com: Scott Bessent's bond plan showed markets what will make the treasury flinch | Fortune (2026-09-21)
  2. finance.liga.net: US debt has exceeded $40 trillion. Does this threaten aid to Ukraine and the hryvnia? (2026-09-21)
  3. ua.news: US national debt exceeds $40 trillion — Cyprus Mail | UA.NEWS (2026-09-20)
  4. kucoin.com: U.S. interest payments on the national debt reached a record | KuCoin (2026-09-20)
  5. dailyhodl.com: US Interest Payments on Public Debt Hit Record $1267362000000 Through August (2026-09-20)
  6. realclearmarkets.com: The U.S. Treasury's Multi-Trillion Dollar Mistake | RealClearMarkets (2026-09-21)
  7. ababnews.com: US Debt-to- GDP Ratio Returns to 100% for the First Time in 80 Years - ABAB News (2026-09-21)
  8. techflowpost.com: Wall Street expects short-term U.S. Treasury issuance to reach $1 trillion. (2026-09-20)
  9. businessinsider.com: Why Goldman Sachs Still Prefers AI Infrastructure to 5% Treasuries - Business Insider (2026-09-21)
  10. nai500.com: Gold Defies Rate Hikes: Why High Rates Are Losing Their Grip on Bullion | NAI 500 (2026-09-21)
  11. marketwatch.com: Midterm voters are overwhelmingly worried about the national debt . But only small fixes are ... (2026-09-20)
  12. moomoo.com: Midterm Voters Are Overwhelmingly Worried About the National Debt . But Only Small Fixes ... (2026-09-21)