00:04America's Debt Mountain has crossed a number that was once almost unimaginable, $40 trillion dollars.
00:12Treasury Department data shows the U.S. national debt has now surpassed $40 trillion dollars for the first time.
00:20And the milestone comes as Washington faces a dangerous combination.
00:24Massive budget deficits, rising interest costs, expensive government commitments, and growing pressure on the bond market.
00:33The debt has more than doubled since Donald Trump first entered the White House in 2017.
00:38And now investors are demanding higher returns to hold U.S. government debt.
00:43The question is no longer simply how much America owes.
00:47It is becoming a question of how much longer Washington can continue borrowing at this pace.
00:54According to Treasury Department data cited by Reuters, total U.S. public debt reached approximately $40.047 trillion at the
01:04close of business Tuesday.
01:06That includes around $32.266 trillion held by the public.
01:11Another $7.782 trillion is classified as intra-governmental debt.
01:18The milestone represents a staggering increase over the past decade.
01:22The national debt has more than doubled since January 2017 when Donald Trump first became president.
01:28And the trajectory has raised fresh concerns over America's long-term fiscal stability.
01:34The debt surge cannot be attributed to one administration alone.
01:40Around one-third of the increase since 2017 came during the COVID-19 pandemic.
01:46The Trump and Biden administrations borrowed heavily to finance emergency relief and economic support.
01:52But the remaining increase reflects a much broader problem.
01:56Government spending has repeatedly exceeded tax revenues.
01:59That means the Treasury has had to keep borrowing to close the gap.
02:04And budget experts say the pattern is becoming increasingly difficult to sustain.
02:09Jessica Riedel of the Brookings Institution says the problem goes far beyond the latest debt milestone.
02:16The United States has been running deficits of roughly $2 trillion a year in recent years.
02:21And that has happened even during periods of economic growth and relative peace.
02:26The underlying imbalance is straightforward.
02:29Washington spends significantly more than it collects in revenue.
02:33Unless that gap narrows, the national debt will continue climbing.
02:38That leaves lawmakers facing politically painful choices.
02:41They could raise taxes, they could cut spending, or they could attempt some combination of both.
02:47The debt crisis is arriving alongside another major economic challenge.
02:53The United States is paying more to borrow money.
02:56Long-term Treasury yields climbed to their highest levels in nearly two decades this week.
03:02Investors are demanding greater compensation amid concerns over government borrowing, inflation, and geopolitical uncertainty.
03:10Higher yields mean higher borrowing costs for Washington.
03:13And when the debt is already measured in tens of trillions of dollars, even relatively small increases in interest rates
03:21can have enormous consequences.
03:24More money spent servicing debt means less money available for other government priorities.
03:30Another warning sign is coming from overseas.
03:33Foreign investors hold nearly one-third of U.S. Treasury securities.
03:37But their holdings have declined over the past year.
03:40That matters because America depends heavily on investors continuing to buy government debt.
03:47If demand weakens, Washington could be forced to offer higher interest rates to attract buyers.
03:53That would increase the government's borrowing costs even further.
03:56And it could create a difficult cycle.
03:59More debt means more interest.
04:02Higher interest means bigger deficits.
04:04And bigger deficits require even more borrowing.
04:08The Treasury is already responding to pressure in the bond market.
04:11Treasury Secretary Scott Besant announced plans to double the size of Treasury buybacks for 10- to 30-year bonds.
04:19Operations will rise to at least $4 billion per operation.
04:23The objective is to support liquidity and functioning in the long-term bond market.
04:28But the underlying problem remains.
04:31The United States continues to borrow an enormous scale.
04:35And investors are increasingly focused on whether Washington has a credible plan to stabilize the nation's finances.
04:42The $40 trillion milestone has now intensified that debate.
04:47The United States remains the world's largest economy.
04:51But its debt burden is entering unprecedented territory.
04:56$40 trillion is not simply another economic statistic.
05:00It is a warning about the growing cost of America's fiscal imbalance.
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