Three Key Facts About the United States’ $40 Trillion Federal Debt

The U.S. federal debt recently surpassed $40 trillion, a figure that raises concerns among economists and policymakers. First, the debt‑to‑GDP ratio now exceeds 120 percent, a level not seen since the post‑World War II era. Second, interest payments on the debt are projected to consume more than 8 percent of the federal budget by 2035, crowding out spending on infrastructure and social programs. Third, while the Treasury can continue borrowing at low rates, a sudden rise in interest rates could sharply increase the cost of servicing the debt, potentially forcing the government to consider tax hikes or spending cuts to avoid a fiscal crisis.