Here's how America's $40 trillion debt can hit your wallet
Axios · LC · trust 58/100
Add Axios on Google An electronic display in Washington, D.C., shows the U.S. national debt on Aug. 19, as federal debt surpassed $40 trillion for the first time. Photo: Mandel Ngan/AFP via Getty Images.
The U.S. national debt this week topped $40 trillion, raising fresh concerns about how rising federal borrowing could affect Americans' finances.
Why it matters: Americans don't personally owe the national debt, but rising debt could pressure lawmakers to raise taxes, cut spending or change federal benefits.
State of play: The gross federal debt hit $40 trillion for the first time on Wednesday.
Higher national debt could make mortgages, student loans and small-business borrowing more expensive by putting upward pressure on interest rates, according to a new report from the Conference Board, a nonprofit think tank.
The big picture: As U.S. debt grows, investors could demand higher yields if they become less confident in the government's fiscal position.
How it works: Mortgage rates , for example, tend to move closely with the yield on the 10-year Treasury note, which reflects the return investors demand to lend money to the federal government, says Brett Loper, executive vice president for policy at the fiscal think tank Peter G. Peterson Foundation.
Threat level: High debt could add to inflation concerns if investors begin to fear that policymakers will eventually rely on inflationary measures to deal with the government's fiscal problems, Loper says.
Zoom in: As the national debt grows, the federal government has to devote more money to interest payments.
Case in point: The federal government is projected to spend more than $1 trillion on net interest in 2026, more than it will spend on any mandatory program other than Social Security or Medicare, per the CBO's projections .
Washington has shown little appetite for changing the nation's fiscal trajectory, leaving the political debate over spending and taxes unresolved.
Courtenay Brown contributed to this report.
sms (opens in new window) facebook (opens in new window) twitter (opens in new window) linkedin (opens in new window) bluesky (opens in new window) Add Axios on Google What to read next Smarter, faster on what matters. Explore Axios Newsletters About Axios Advertise with us Careers Contact us Newsletters Axios Live Axios HQ Privacy policy Terms of use Axios Homepage Axios Media Inc., 2026
Read the original at Axios →
Open in TruthVane →