US Public Debt Surpasses US$40 Trillion, Raising 'Doom Loop' Risk

For the first time, the total public debt of the United States has exceeded US$40 trillion, reaching US$40.05 trillion by the end of business on Tuesday, as reported by the US Treasury Department on Wednesday. This debt has increased by nearly one-third in under five years, raising concerns about a potential 'doom loop.' The US$30 trillion threshold was only crossed in January 2022. Despite persistent calls to address the historically large financial deficits, lawmakers in Washington have largely remained unresponsive. Republicans have consistently opposed tax increases, while both parties hesitate to endorse unpopular cuts to healthcare and retirement benefits for seniors. Many experts believe that Congress and the administration will only respond after a significant disruption in financial markets. US Treasury Secretary Scott Bessent noted that one of his motivations for entering politics was to confront deficits that are escalating at an unprecedented rate outside of major crises. The situation shows no signs of improvement.