US Debt Now Surpasses Rp661,000 Trillion, Iran War Causes Losses
The United States’ national debt has officially surpassed US$39 trillion, or Rp661.83 quadrillion (US$1 = Rp16,970), this week.
The figure published by the Bureau of the Fiscal Service underscores the immense pressure on the current administration’s budget priorities, from tax cuts and increased defence spending to handling the debt itself.
This record debt milestone coincides with public concerns over the rising costs of the ongoing armed conflict between the United States, Israel, and Iran, which shows no signs of abating.
Financial Burden from the Iran War and Sectoral Impacts
The war in Iran, now in its twentieth day, is placing significant additional strain on the nation’s finances. US National Economic Council Director Kevin Hassett stated that the government has realised expenditures of US$12 billion to fund the conflict.
This amount is expected to continue growing following confirmation from Defence Secretary Pete Hegseth that the Pentagon has requested additional funding of US$200 billion from the White House, though the figure could still fluctuate dynamically.
Research from TIME indicates that the US$12 billion already spent is theoretically equivalent to the healthcare costs for a population of 1.3 billion.
This geopolitical escalation is also directly impacting domestic consumer purchasing power due to disruptions in oil and gas distribution routes in the Strait of Hormuz. Crude oil prices have breached US$100 per barrel, directly triggering fuel price hikes in the US.
This surge in energy costs is forcing commercial airlines, such as Qantas, to promptly adjust and raise airfare prices. Additionally, the disrupted global supply chain is expected to trigger fertiliser price increases, which will ultimately lead to swelling bills for basic household necessities in the coming months.
Campaign Promises, Tariffs, and Budget Deficit Reality
President Donald Trump has repeatedly voiced his promise to curb the national debt since his first presidential campaign in 2015. Before his first term, he even claimed he could pay off the entire debt, then around US$19 trillion, within eight years through renegotiating global trade deals.
Furthermore, his economic policy concept includes implementing trade tariffs on partner countries to bolster state coffers and pay down the debt.
On Independence Day last year, the government also enacted legislation that the White House claimed would reduce the debt to 94% of Gross Domestic Product.
However, the strategic plan to use tariff revenues faces crucial hurdles after the Supreme Court ruled in February that most of those tariff policies violate the law, a decision deemed highly disappointing by the President.
Since taking office last year, the national debt has actually continued to climb by around US$2.8 trillion. Nevertheless, White House Spokesperson Kush Desai emphasised that the federal deficit fell in fiscal year 2025 to US$1.78 trillion, down US$41 billion from the previous year.
This decline was driven by increased individual tax receipts, bureaucratic streamlining that reduced the number of federal employees to the lowest level since 1966, and firm action against fraud in social welfare programmes.
Details and Composition of National Debt
According to the debt update report from the Joint Economic Committee, the US gross national debt reached US$38.86 trillion at the beginning of March, which has since continued to breach the US$39 trillion mark this week.
The structure of this debt is broadly divided into two categories: debt held by the public at US$31.27 trillion and intragovernmental debt at US$7.59 trillion.
US public debt instruments traded on the market are largely dominated by notes with a 50.55% share, nominally valued at US$15.76 trillion. Short-term bills account for 21.83% or US$6.81 trillion, while long-term bonds hold a 16.96% share valued at US$5.29 trillion.
The remaining 10.67% is allocated to other financing securities. Demand for US debt instruments remains very strong in the market, reflected in the bid-to-cover ratio for February 2026 at 2.89 for 4-week bills, 2.39 for 10-year notes, and 2.75 for 30-year bonds.
From the maturity profile perspective, about 33% of this tradable debt will reach maturity within the next twelve months, with the overall average debt maturity around 70 months.
Debt Accumulation Rate and Rising Interest Burden
The speed at which the US government is accumulating debt shows a constant acceleration. Referring to the position as of 17 March 2026, the total national debt has reached US$39.01 trillion.
This figure records a massive increase of US$2.8 trillion compared to the same period a year earlier, when the total debt was still at US$36.21 trillion.
This annual rise stems from a surge in public debt by US$2.45 trillion and additional intragovernmental debt of US$350.69 billion.
The debt addition rate is moving very quickly. Based on data from the past year, the average daily debt increase is about US$7.67 billion.
If broken down further,