US debt has hit $40tn - Will that be a wake-up call? - BBC News

The US hit a debt milestone this week, but just how worried should we be about the world's largest economy?

Image source, Getty ImagesByMichael RaceBusiness reporter, Reporting fromNew YorkPublished21 August 2026, 00:15 BSTUpdated 6 hours agoWhat with a 250th birthday, Taylor Swift's wedding and the football World Cup, Americans could be forgiven for taking their eye off the ball this summer.

But signs of economic trouble have been building. This week they hit the headlines when US national debt passed the $40tn (£29.4tn) mark, raising concerns both at home and abroad.

It took almost 200 years for US national debt to reach $1tn for the first time, says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

That milestone back in 1981 was treated as a wake-up call. "At that time, President [Ronald] Reagan told the nation in a televised address, 'If we as a nation needed a warning, let that be it'," she said.

"Jumping to America's 250th year, we are spending more than that just on interest payments on our debt."