The United States national debt crossed $39 trillion for the first time Tuesday, arriving at the grim milestone less than five months after it first hit $38 trillion in late October—a pace of accumulation that budget watchdogs and academic economists are now calling, with unusual unanimity, “unsustainable.”
The milestone, confirmed in Wednesday’s Daily Treasury Statement, lands amid a politically charged moment: it comes roughly two weeks before the ten-year anniversary of President Trump’s 2016 campaign promise to eliminate the national debt within eight years. Instead, the gross national debt has roughly doubled since Trump first took office—it was $19.9 trillion in January 2017.
“Our moral duty to the taxpayer requires us to make our Government leaner and more accountable,” President Trump wrote in March 2017, as he issued an executive order directing OMB Director Mick Mulvaney to submit a comprehensive plan to reorganize Executive Branch departments and agencies in order to keep his promise to put in place common sense reforms to eliminate waste so that the Government better serves all Americans. “We’re going to do more with less,” Trump said at the time.
“As America soars past $39 trillion in debt, we must recognize this alarming rate of growth and the significant financial burden we are putting on the next generation,” Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told Fortune in a statement. “Borrowing trillion after trillion at this rapid pace with no plan in place is the definition of unsustainable.”
A clock that doesn’t stop
At the current rate of growth, the Peterson Foundation projects that the debt will hit $40 trillion before this fall’s elections—another trillion-dollar jump in roughly the same compressed timeframe. Michael Peterson called the figure “staggering.” The speed of accumulation has accelerated sharply: the debt added its latest trillion in what the foundation estimates is less than five months, a rate of fiscal expansion that has few modern precedents outside of wartime or acute financial crisis.
The milestone arrives as the Congressional Budget Office, in its February 2026 outlook, projected that the federal deficit will reach $1.9 trillion in fiscal year 2026 and swell to $3.1 trillion by 2036 under current law. Over that same decade, debt held by the public is projected to surge from 101% of GDP today to 120% of GDP by 2036, eclipsing the previous all-time record of 106% set just after World War II. The long-term picture is even bleaker: CBO’s extended baseline now shows debt rising to 175% of GDP over the next 30 years, according to the Committee for a Responsible Federal Budget.
The $1 trillion interest bill
Perhaps the most alarming dimension of the crossing is what it costs just to carry the debt. Net interest payments on the national debt are projected to exceed $1 trillion in fiscal year 2026—nearly triple the $345 billion in interest the government paid in 2020, at the onset of the pandemic. In the first three months of the current fiscal year alone, net interest payments reached $270 billion, already surpassing the nation’s defense spending for the same period.
Peterson’s statement underscored just how persistent that interest burden will be: over the next 30 years, the government is projected to spend nearly $100 trillion on interest alone—an amount that dwarfs every major federal program. For individual Americans, the Peterson Foundation puts the interest tab at an average of at least $47,000 per person over the next decade.
“Interest is the fastest-growing ‘program’ in the federal budget,” Peterson said.
What the numbers actually mean
Not all economists view the headline $39 trillion figure with equal alarm—though almost all agree the trajectory is dangerous. Kent Smetters, director of the Penn Wharton Budget Model and one of the nation’s foremost fiscal economists, argued that the gross debt number is actually less economically meaningful than debt held by the public, which now stands at $31.3 trillion. The gross figure of $39 trillion, he explained to Fortune, is intragovernmental debt, basically “the left hand of government owing the right hand.” Examples include the Social Security trust fund, and there’s no independent economic significance to this beyond its role as a political signaling device. Still, he added with his trademark understatement, “the fact that debt held by the public has now exceeded $31 trillion is not great.”
“The real problem,” Smetters said, agreeing with Peterson, “is that we are on an upward debt path that is unsustainable.” When you account for both explicit debt held by the public and the implicit liabilities buried in Social Security, Medicare, and other long-term obligations, Smetters’ model puts the true fiscal gap closer to $100 trillion.
The Penn Wharton Budget Model has previously estimated that, without major policy changes, U.S. Treasury debt will become unable to roll over its accumulated obligations within roughly 20 years—a scenario that would force either explicit default on interest payments or an implicit default through inflation.
A Credibility Gap in Washington
Smetters has also previously raised pointed concerns about the budgeting apparatus that’s supposed to help lawmakers navigate the crisis. Under rules dating to the Gramm-Rudman-Hollings Act, the Congressional Budget Office is legally prohibited from projecting discretionary spending growth faster than inflation over its 10-year window—an assumption that both the CBO and outside analysts agree bears no resemblance to historical reality. The result, Smetters argued, is that official projections “constantly underestimate the growth in the debt,” creating a feedback loop in which lawmakers are lulled into false confidence by numbers their own budget office knows are too optimistic.
The CBO’s current projections, for instance, still assume Social Security will pay full benefits even after its trust fund is expected to deplete around 2032—effectively hiding a major future spending shock from the official forecast.
Politics and the Public
The milestone arrives at a moment of acute public anxiety about federal finances. Nine in 10 Americans say the rising debt is driving up the cost of living and contributing to higher borrowing costs, according to a survey by the Peterson Foundation—a cross-partisan concern that has yet to produce cross-partisan legislative action.
The U.S. fiscal position has deteriorated to what the Peterson Foundation now describes as the worst among peer nations. President Trump’s budget proposal is expected to be released during the week of March 30, setting up a political battle over spending and revenue that will play out against the backdrop of a debt counter that, by Peterson’s clock, will already be ticking toward $40 trillion.
“America faces complex and critical challenges, both at home and abroad,” Peterson said, “and putting our debt on a sustainable path will support a stronger, more secure future.” The good news, he added, is that solutions exist. The harder news is that in the 10 years since the last major political promise to fix this, the debt has only grown.
