US national debt reaches 40 trillion dollars, budget deficit increases

In the US, the budget deficit reached approximately 2 trillion dollars in the fiscal year ending September 30, while total public debt crossed the 40 trillion dollar threshold in August, and debt service costs hit a record high of 1.36 trillion dollars.

The US government's debt reaching 40 trillion dollars and rising borrowing costs are sparking debates over fiscal policies for the Donald Trump administration and Republicans ahead of next month's congressional midterm elections. According to Department of the Treasury data, the budget deficit for the fiscal year ending September 30 increased by 12 percent compared to the previous year, settling at approximately 2 trillion dollars. This rate was recorded as the highest deficit since the spending wave during the COVID-19 pandemic era.

While high entitlement payments, tax cuts, increasing military spending, and rising interest costs are causing the government to borrow more, the debt-to-GDP ratio hovers around 100 percent. The debt amount owed to Treasury bond holders reaches approximately 32 trillion dollars, and 30-year mortgage interest rates have risen to 7.40 percent in parallel with the increase in overall credit costs. While the Trump administration aims to alleviate fiscal pressure through economic growth and customs tariffs, the government was forced to issue 145 billion dollars in refunds due to tariffs canceled by the Supreme Court earlier in the year.