WASHINGTON, DC — The U.S. national debt has moved past $40 trillion, a threshold that puts federal borrowing and the cost of carrying that borrowing back in the spotlight. The figure comes as voters and policymakers are already arguing about affordability and the federal budget, but the milestone itself does not mean Americans will see a direct bill in the mail.
The more immediate issue is how rising debt can affect the economy over time. The Congressional Budget Office says the federal government’s interest payments are becoming a much larger expense, and those costs can shape borrowing conditions, even if they are only one factor among several that influence mortgages and other rates.
What The Numbers Show
The Congressional Budget Office projects the federal government will spend about $1 trillion on net interest in 2026, then more than $2.1 trillion by 2036. The agency also says those interest costs would rise from about 3.3% of gross domestic product in 2026 to 4.6% in 2036, putting net interest close to total federal discretionary spending by that point.
On the balance sheet, the CBO projects debt held by the public will equal 101% of GDP in 2026 and climb to 120% by 2036. That would exceed the previous post-World War II record of 106% set in 1946. The agency also projects the federal deficit will grow from $1.9 trillion in 2026 to $3.1 trillion in 2036.
Why Debt Still Matters
The CBO says large and persistent federal borrowing can crowd out private investment, which may help push interest rates higher over time. That does not mean the debt is the only reason mortgage rates are elevated, or that the $40 trillion figure alone sets household borrowing costs. Inflation, Federal Reserve policy and Treasury yields all affect what lenders charge.
The U.S. has added debt under presidents from both parties, and Treasury’s historical dataset tracks federal debt back to 1789. The increase during any one administration reflects decisions made by Congress and the president, along with economic conditions, interest expenses and unusual events such as the pandemic. The CBO’s warning is about the path ahead, not a claim that a crisis has already arrived.
What Comes Next
For households, the main effect is indirect: a bigger federal interest burden can leave less room in the budget for other priorities, and continued borrowing can put pressure on long-term rates. The CBO projects debt held by the public could reach 175% of GDP by 2056 if current law stays in place, which would force harder choices on taxes, spending, or both.
Readers who want to check the figures can look at the Congressional Budget Office’s budget and debt projections and Treasury’s historical debt dataset. The broad takeaway is narrow but important: $40 trillion does not automatically produce a household crisis, but it does signal a rising long-term cost that could shape borrowing, budgets and policy debates for years.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
