Alert! US National Debt Breaks Threshold, Reaches Rp 712 Thousand Trillion

The United States’ national debt has officially surpassed US$40 trillion (approximately Rp 712,000 trillion) for the first time in history. This record-breaking figure has triggered stark warnings of a fiscal crisis due to soaring costs of social safety net programmes and debt interest payments that now far exceed state revenue following massive tax cuts.

Citing Reuters on Thursday (20/08/2026), the US Treasury Department reported that total public debt outstanding touched US$40.047 trillion on Tuesday. This total includes Treasury securities held by the public amounting to US$32.266 trillion (Rp 574,334.8 trillion) and intergovernmental debt holdings of US$7.782 trillion (Rp 138,519.6 trillion).

Signs of panic have begun to appear in global bond markets as demand from foreign investors, who hold nearly a third of US debt securities, has continued to shrink over the past year. Long-term bond yields on Tuesday also surged to their highest level in nearly two decades after a US$25 billion (Rp 445 trillion) bond auction recorded the highest yield since 2021.

Responding to this extreme pressure, US Treasury Secretary Scott Bessent on Wednesday immediately took aggressive action by doubling the size of buybacks for 10- to 30-year debt securities to at least US$4 billion (Rp 71.2 trillion) per operation in an effort to push bond yields down.

However, US President Donald Trump responded to the turmoil casually when asked whether Americans should be worried about bond market volatility, and instead renewed his demand for lower interest rates.

“I don’t think so at all. I think we have a very strong country, and we’re going through these ridiculous interest rates, they’re ridiculous. Look, when our country is strong, interest rates should come down,” Trump said.

The swelling debt pile has a long background. Federal government debt has now doubled in less than a decade, starting from US$19.95 trillion (Rp 355,110 trillion) when Trump was first inaugurated in January 2017.

US debt surged by US$11.6 trillion (Rp 206,480 trillion) during Trump’s two terms in the White House. Public debt swelled by US$7.8 trillion in his first term, largely driven by the pandemic, and since his re-inauguration in January 2025, the debt burden has been increased by a further US$3.8 trillion.

Meanwhile, during the four years of former President Joe Biden’s term, US debt also exploded by US$8.4 trillion (Rp 149,520 trillion). The burden in the Biden era was driven by COVID-19 recovery spending, massive infrastructure investment, and clean energy subsidies.

About a third of the total debt surge over the past decade came purely from pandemic-era borrowing by both presidents, while the rest resulted from long-term structural imbalances between taxes and spending. Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), issued a sharp warning about this fiscal madness.

“Forty trillion dollars of debt is not just on the government’s ledger; it is felt throughout the economy and finds its way into people’s pockets in one way or another,” MacGuineas said.

“The more we borrow, the more we worsen inflation, squeeze other priorities in the budget, and make ourselves vulnerable to domestic emergencies and overseas turmoil,” she stressed.

The US$40 trillion milestone came less than five months after US debt touched US$39 trillion. Notably, this amount has quadrupled in less than 20 years, after the US previously took until 1981 just to breach its first US$1 trillion in debt.

“It is astonishing how predictable the fiscal decline of a global power can be,” she concluded.

The condition of the US state coffers is currently truly dire. Last week, the US Treasury Department reported the fourth-highest monthly deficit in its history, at US$432 billion (Rp 7,689.6 trillion) for July alone. This figure was devastated by tariff refunds that made customs revenue negative for three consecutive months, plus exploding Social Security and Medicare costs. The deficit for the first 10 months of fiscal year 2026 has already exceeded the total deficit gap for all of fiscal year 2025.

Although Trump launched the Department of Government Efficiency (DOGE) to cut federal agency workers, these cuts only target the smallest portion of the budget, namely discretionary spending. In reality, the US spends about US$7 trillion (Rp 124,600 trillion) each year, and 60% of that is already locked in for mandatory programmes such as Social Security, Medicare, Medicaid, and veterans’ care.

Worse still, Trump’s flagship legislative package in his second term, the One Big Beautiful Bill Act, is estimated to add US$4.7 trillion (Rp 83,660 trillion) in new debt according to the Congressional Budget Office (CBO).

Beyond these programme costs, the US must now burn US$1.1 trillion (Rp 19,580 trillion) purely to pay interest on its debt. This debt servicing burden has for the first time officially surpassed Pentagon funding in the fiscal year 2025 budget. Tragically, in the first 10 months of fiscal year 2026, interest costs have officially overtaken Medicare health spending and become the government’s second-largest budget item after Social Security.

All of this is further exacerbated by the swelling healthcare costs for the baby boom generation that are draining trust funds.