National debt reaches grim $40 trillion milestone. Here’s why that matters

CNN Business

Aug 20

The United States is digging itself into an ever-deeper debt hole. The federal debt hit a record $40 trillion on Tuesday, according to the Treasury Department. It’s an inauspicious ...

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Here’s why that matters\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-08-20 04:11 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://edition.cnn.com/2026/08/19/economy/national-debt-hits-40-trillion-dollars-vis><strong>CNN Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The United States is digging itself into an ever-deeper debt hole.\n    \n\n            The federal debt hit a record $40 trillion on Tuesday, according to the Treasury Department. It’s an inauspicious ...</p>\n\n<a href=\"https://edition.cnn.com/2026/08/19/economy/national-debt-hits-40-trillion-dollars-vis\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NHLD","symbol_name":"National Holdings Corporation","start_time":0,"source_url":"https://edition.cnn.com/2026/08/19/economy/national-debt-hits-40-trillion-dollars-vis","article_id":"2660473505","we_media_id":null,"thumbnails":[],"rights":{"source":"cnn_highlight","url":"https://edition.cnn.com/2026/08/19/economy/national-debt-hits-40-trillion-dollars-vis","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2660473505","pubTimestamp":1787170307,"columns":[],"sourceInfo":{"source_id":"cnn_highlight","name":"CNN Business"},"weMediaInfo":null,"summary":"The United States is digging itself into an ever-deeper debt hole.The federal debt hit a record $40 trillion on Tuesday, according to the Treasury Department. It’s an inauspicious milestone that will have consequences for Americans, businesses and the government for years to come. . While the nation has long carried a significant amount of debt, there are several recent trends that have budget and financial markets experts even more concerned. The tab has been growing more swiftly in recent years; interest payments on the debt have ballooned as interest rates and borrowing have risen; and all this is happening in relatively good economic times.Several factors are contributing to the skyrocketing debt load. A big one is that the nation is aging, with roughly 10,000 Baby Boomers retiring every day and senior citizens living longer. That means that the federal government is shelling out ever more on Social Security and Medicare. These bedrock programs are on even shakier fiscal ground wit","collect":0,"end_time":0,"defaultTopTitle":"cnn.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NHLD":"National Holdings Corporation","CLIX":"ProShares Long Online/Short Stores ETF","CGDV":"Capital Group Dividend Value ETF","CAOS":"ALPHA ARCHITECT TAIL RISK ETF","DFUV":"DIMENSIONAL US MARKETWIDE VALUE ETF","BK4588":"碎股","EQRR":"ProShares Equities for Rising Rates ETF","BK4585":"ETF&股票定投概念","RORO":"ATAC US Rotation ETF","RJZ":"ELEMENTS Linked to the Rogers International Commodity Index - Metals Total Return"},"translate_title":"国债达到40万亿美元的严峻里程碑。这就是为什么这很重要","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NHLD":1.5,"CGDV":0.9,"CAOS":0.86,"RORO":0.67,"DFUV":0.76,"RJZ":0.86,"CLIX":0.76,"EQRR":0.67},"content_text":"The United States is digging itself into an ever-deeper debt hole.\n    \n\n            The federal debt hit a record $40 trillion on Tuesday, according to the Treasury Department. It’s an inauspicious milestone that will have consequences for Americans, businesses and the government for years to come. (The Treasury Department’s data on the federal debt is released on a one-day delay.)\n    \n\n            While the nation has long carried a significant amount of debt, there are several recent trends that have budget and financial markets experts even more concerned. The tab has been growing more swiftly in recent years; interest payments on the debt have ballooned as interest rates and borrowing have risen; and all this is happening in relatively good economic times.\n    \n\n            “On our current path, we’re going to be at $50 trillion in just six years. If you look backward, we were at $20 trillion less than 10 years ago,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, a fiscal watchdog group. “We’re really putting our economy and our country’s future in jeopardy.”\n    \n\n\n\n\n            Several factors are contributing to the skyrocketing debt load. A big one is that the nation is aging, with roughly 10,000 Baby Boomers retiring every day and senior citizens living longer. That means that the federal government is shelling out ever more on Social Security and Medicare. These bedrock programs are on even shakier fiscal ground without enough workers to support the burgeoning number of beneficiaries.\n    \n\n            Also, over the last few decades, Congress has passed multiple packages that cut taxes and increased spending, including the Tax Cuts and Jobs Act of 2017 and the One Big Beautiful Bill Act of 2025 under President Donald Trump, and several Covid-19 pandemic relief bills under Trump and former President Joe Biden. These measures are projected to increase the federal debt by trillions of dollars over time.\n    \n\n            The $40 trillion milestone is hitting sooner than was expected even a few years ago. The Congressional Budget Office projected in May 2023 that the US would cross that threshold in fiscal year 2028.\n    \n\n            And the federal government’s spending continues to outpace the revenue it collects. Already, the government has racked up a $1.8 trillion deficit for the first 10 months of this fiscal year, which ends September 30.\n    \n\n\n\n\n        Soaring interest payments\n\n\n            The mounting debt, along with rising interest rates, has led to an explosion in interest payments the federal government has to shell out.\n    \n\n            For years, low interest rates enabled the government to borrow freely. But that came to an end a few years ago when the Federal Reserve began raising interest rates to combat pandemic-era inflation.\n    \n\n            Interest payments are expected to top $1 trillion this fiscal year – a record level.\n    \n\n\n\n\n            Those costs have more than tripled over the past five years and are now neck and neck with Medicare as the government’s second-largest expense behind Social Security, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a watchdog group.\n    \n\n            That means the US is spending more on interest payments than on national defense and 50% more than on children’s programs. The interest payment obligation makes it more difficult for the government to support other federal programs and priorities.\n    \n\n            “We’re spending significantly more to service past debt than to invest in our future,” Goldwein said, adding that “Our debt is begetting more debt. It creates a vicious cycle.”\n    \n\n            Although former Federal Reserve Chair Jerome Powell and others have said the US is on an “unsustainable fiscal path,” Congress has shown little appetite in recent years to address the nation’s unbalanced finances, which has led to downgrades of its credit ratings.\n    \n\n            Republicans on Capitol Hill raised the debt limit by $5 trillion last year, as part of the One Big Beautiful Bill Act, which means lawmakers likely won’t have to contend with the US hitting the debt ceiling until sometime in 2027, experts said. The debt ceiling has prompted Congress to review its spending levels at times, most recently in 2023.\n    \n\n        Impact on bond market\n\n\n            The mounting national debt matters for the bond market and the interest rates that set borrowing costs across the economy.\n    \n\n            The 30-year US Treasury yield on Tuesday hit its highest level since 2007. The 10-year yield traded near its highest level of Trump’s second term. Yields have climbed this year as investors assess a range of factors including inflation nerves, rising government deficits, increased supply of corporate bonds and uncertainty about the Federal Reserve’s path for interest rates.\n    \n\n            As the United States slips further into a debt hole, investors are demanding greater compensation for the risk of lending to the government. Bond yields, which influence borrowing costs across the economy, are rising amid this backdrop.\n    \n\n            The 10-year US Treasury yield influences mortgages rates, auto loans and rates for business loans. Higher yields translate into tighter financial conditions, which can weigh on consumers and restrict business investment. Higher yields also mean higher borrowing costs for the government, making it most expensive to pay down the mounting national debt.\n    \n\n            The Treasury Department on Wednesday announced it would increase its buybacks of long-term bonds in the coming months. Analysts said it reflects the Trump administration’s concern about rising yields and how they could impact affordability as well as the ability to pay down the debt.\n    \n\n            An auction for 30-year Treasuries earlier this month saw the highest yield since 2001 – a sign that investors are demanding more compensation to hold US debt.\n    \n\n            In 2025, Moody’s downgraded US debt, stripping the United States of its last perfect credit rating. Despite being downgraded, US debt is still ranked a notch below perfect and ahead of debt from major economies like France and Japan.\n    \n\n            Other governments are also experiencing similar issues. In the United Kingdom, France, Germany and Japan, government bond yields are trading at or near multi-year highs as investors reckon with concerns about spending and deficits.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}