Breaking: U.S. Debt Surpasses $40 Trillion. Here’s What You Need to Know

The U.S. national debt has crossed into the $40 trillions. The Treasury’s live counter had it at about $40.07 trillion on September 27, 2026. When we wrote about this on August 1st, it was still in the $39 trillions.

Crossing into the $40 trillions carries both a psychological and an economic impact. From a psychological perspective, we went from $39 to $40 in relatively quick time. And as extreme compound interest works, we’re going to go from $40, theoretically, to $50 in a shorter time, unless Congress stops spending and addresses the deficit (not likely).

Why should a regular person care about this?

It’s natural for a country to have debt. It’s how it finances its operations: it projects spending needs, takes in taxes, but then miscalculates how much it needs. This is important for regular people because you need to know. This could impact your voting behavior, it could impact your personal finances, and it could impact how you plan for the future.

How the U.S. Found Itself $40 Trillion in Debt

The debt really accelerated over the last 15 years, especially once the pandemic hit, because the government started printing money while simultaneously borrowing more than it needed to because rates were low. (Interesting how they control both of those levers, but that’s a topic for another day.)

So recently, the combination of printing hundreds of billions of dollars and then continuing to borrow at an aggressive rate because rates were low compounded this. Theoretically, we could have gotten ahead of this if Congress decided to spend less, but they haven’t done that. In fact, the government has only run a budget surplus a handful of times in recent decades, most recently from 1998 to 2001. Deficits are the norm.

Deficit vs. Debt: What’s the Difference?

When the country’s running a deficit, it means it’s spending more than it’s bringing in that year. The debt is bigger picture: it’s all of those yearly deficits carried forward and added together, with any surpluses subtracted out.

Schwab

So, for example: say the existing debt is $300, this year’s deficit is $100, and last year there was a surplus of $50. You add the deficit and subtract the surplus, which puts you at $350. Stack that up over more than two centuries and you get to $40 trillion.

Treasury Bonds vs. Treasury Bills

You can think of Treasury bills as short-term investments that mature in a year or less, whereas Treasury bonds are long-term investments that mature in 20 to 30 years. This is how the government funds itself. It sells these securities, an investor hands over cash today, and the government pays it back later with interest.

Of the debt, about 80% is held by the public, and 20% is intragovernmental (the government owing itself, mostly through trust funds like Social Security). If you want to follow the number yourself, the Treasury’s own Fiscal Data has a daily live counter, and the Peter G. Peterson Foundation and Council on Foreign Relations both have good plain-language breakdowns.

Who Does the U.S. Owe?

There is some good news here. Over the last couple of decades, our foreign balances, meaning the amount we owe to foreign countries, have decreased. It used to be a popular refrain that China bought up all our debt, but that’s actually not the case. Now, mostly the debt is held domestically. Of the debt held by the public, domestic holders own more than two-thirds, and foreign investors hold about 31%. The biggest foreign holders are Japan, the United Kingdom, and China, and China’s share has been shrinking for over a decade.

PGPF

It is probably for the best that most of the debt is held domestically. At least those holders’ interests are more in line with the country’s success. Nobody wants us to default, but it’s better that citizens of the United States hold United States debt, because then they’re more inclined to vote to lower it.

Think of a credit card company. They don’t want you to pay off your card. They want you to pay interest. Which moves us into interest.

Interest Is Eating Up More of the Budget

To put this into perspective, we now spend more on interest than we do on national defense, which, if you know anything about how the United States budget works, is an immense number. So when you’re thinking about whether this is a big deal: just the interest we pay on the debt is now more than our biggest expense, which is usually defense.

According to Charles Schwab, annual interest (about $1.21 trillion) passed defense spending (about $1.17 trillion), the first sustained time that’s happened since World War II. Interest is now roughly 19% of all federal spending, nearly one out of every five dollars. And the rate the government pays on the debt has roughly doubled since 2021, from about 1.5% to over 3%, so as old debt comes due it gets rolled over at that higher rate.

There’s a lot of politics involved, and Washington is divided. Yes, we do want growth, but we also want the debt to go down. They keep telling us they can grow our way out of debt. And yes, we will continue to grow, and it’s likely the U.S. economy keeps growing. But they also need to actually address the debt.

Treasury Secretary Scott Bessent says the country can grow our way out of this with 3% growth, though the Council on Foreign Relations notes the U.S. has hit 3% growth in only five years since 2000. On the other side, Apollo chief economist Torsten Slok warned the U.S. has “never entered a recession with this little fiscal buffer,” and Maya MacGuineas of the Committee for a Responsible Federal Budget said today’s debt “isn’t borne from a seismic global conflict, but rather a total bipartisan abdication of making hard choices.”

Does the National Debt Affect Everyday Americans?

Yes. The national debt, especially the excessive spending, pulls money away from programs that are specifically supposed to help the American people, the big two being Medicare and Social Security, though there are others.

And as they continue to borrow, while simultaneously devaluing the dollar by printing more, your purchasing power is going down. Which is why there needs to be an alternative. That takes us to gold and silver.

MacroMicro

The dollar has lost more than 90% of its purchasing power over the last century.

Owning Gold and Silver Consistently Beats Holding Dollars

When you look at your portfolio, you want it to grow and increase in value. If your portfolio is 100% cash, you’re losing 2 to 4% of its value every year. If you own appreciating assets like precious metals, real estate, or equities, then you at least get to benefit from inflation and the growth of the American economy.

You may have heard that buying gold is betting against America. That’s not the case at all, because gold doesn’t just materialize. Many gold-producing companies are American corporations. So if you’re buying gold, you’re within the supply chain of an American miner, or an American equipment manufacturer, or paying the wages of the miners and engineers who made the equipment.

Think of gold as the anchor of a precious metals portfolio. It’s consistently the least volatile. It has what’s considered a low beta, meaning it’s not affected as much by stock market crashes or exuberance.

Silver is different. You can buy much more volume of silver than gold. It’s a good way to diversify, and if you’re starting to invest and don’t know where to start, silver is a good place. Silver is consistently more volatile over time, but it’s still very liquid and very in demand as an industrial metal.

CMI

According to J.P. Morgan Private Bank, gold has averaged about 12% a year over the 20 years ending in 2025, and it returned 65% in 2025. Central banks around the world have been buying gold and selling Treasuries.

National Debt Is Here to Stay, So Preparation Is Your Best Friend

If you remember anything from this article, it’s that the government is not in a position to help everyday Americans right now. That makes study and preparation more important than ever. You don’t want your politicians dictating how much your cash is worth. Investing in real assets like gold and silver can help you protect against inflation and own appreciating assets that are scarce, valuable, and liquid.

We don’t have a crystal ball. It seems like the debt is going to keep growing, unless there’s a very large bipartisan effort to address it.

We’ll leave you with a line from Warren Buffett: “I could end the deficit in five minutes. You just pass a law that says that anytime there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.” But until the incentives are aligned, that’s not likely to happen.

If you want to talk through what these headlines mean for your money, you can track daily spot prices or reach a non-commission broker at CMIGS.com.

The post Breaking: U.S. Debt Surpasses $40 Trillion. Here’s What You Need to Know first appeared on CMI Gold & Silver.

Source: https://www.cmi-gold-silver.com/u-s-debt-surpasses-40-trillion/