For the first time since 1946, the United States national debt held by external creditors has exceeded the country’s entire gross domestic product for a fiscal year. Newly released figures show debt held by the public reached 100.03 percent of GDP by the close of September 2026, driven by spending and tax cuts during successive emergencies.
The milestone arrived with the close of the 2026 fiscal year on September 30, when economic output reached more than $32.2 trillion according to the Bureau of Economic Analysis. Against that economic output, federal debt held by the public stood at more than $32.4 trillion, per the Treasury Department.
With our national debt exceeding our GDP and annual interest payments exceeding $1 trillion, we cannot continue to neglect our fiscal responsibilities. That’s why I helped introduce legislation to establish a bipartisan, bicameral fiscal commission to address our debt and avoid…
While gross national debt crossed $40 trillion earlier in the year, economists point out that debt held by the public offers a clearer picture of the government’s borrowing burden because it excludes money the federal government owes to its own trust funds and agencies. Total national debt reached $40.047 trillion in August 2026 before climbing to $40.17 trillion by the end of the fiscal year on September 30. Other reports place the total debt as of a recent Wednesday at more than $40.5 trillion, with commentator @Gemini reporting a figure of $40,564,400,433,014.
That triple-digit threshold has not been reached at a fiscal year-end since 1946, following the heavy borrowing required to finance World War II, when the ratio hit a record 106 percent. In contrast, the ratio was 99.4 percent at the end of fiscal 2025, and the 100.03 percent result came in below the Congressional Budget Office’s February forecast of 100.6 percent.
How Decades of Bipartisan Borrowing Pushed the Debt-to-GDP Ratio Past 100 Percent
The path to parity between America’s debt and its economy reflects a long-term structural imbalance spanning multiple administrations. In 2000, the debt-to-GDP ratio stood at a modest 33.7 percent and was declining. At the turn of the century, the national debt was approximately $5.7 trillion; by the start of President Trump’s second term, it had risen to $36.2 trillion.
Washington boosted federal spending and cut taxes in response to the September 11 terrorist attacks in 2001, the 2008 global financial crisis, and the COVID-19 pandemic in 2020. At the same time, an aging domestic population steadily increased spending on Social Security and Medicare. Major legislative changes added to the ledger as well, including the One Big Beautiful Bill Act signed in July 2025, which the Congressional Budget Office projected would add $4.7 trillion to the national debt through 2035 and raise the statutory debt limit from $36 trillion to $41 trillion.
New: The US debt-to-GDP ratio for FY2026 clocks in at …. 100.03%. If that survives after GDP revisions, it's the first triple-digit year since 1946. https://t.co/Rgg7pckuAg
Rising Borrowing Costs and Investor Shifts Threaten Future Fiscal Stability
The financial pressure extends far beyond government ledgers into everyday consumer markets. Mounting federal borrowing, combined with economic uncertainty surrounding the Iran conflict, has sent bond yields soaring this year. The yield on the 10-year U.S. Treasury bond is more than 90 basis points higher than it was the day before the U.S. and Israel launched the Iran conflict. On Oct. 28, that yield was 5.05 percent, while the 30-year Treasury bond trades near 5.31 percent—an increase of roughly 68 basis points from the day before the war began.
At the same time, long-term institutional buyers in the public sector have stepped back. The Federal Reserve and foreign central banks have reduced their share of Treasury holdings compared to prior decades; specifically, Fed quantitative tightening from 2022 to 2025 reduced its Treasury holdings by $1.7 trillion.
The cost of servicing this debt has reached record levels. For fiscal year 2026, net interest costs were $1.052 trillion, an 8.2 percent increase from $970 billion in fiscal 2025. In the first nine months of fiscal 2026 alone, net interest payments totaled approximately $827 billion, which exceeded the $713 billion spent on defense. Debt service costs reached a record $1.36 trillion by the end of the fiscal year, consuming roughly 15 percent of federal spending and 20 percent of federal revenue.
Long-Term Projections Show Little Relief Ahead Without Legislative Action
The outlook provided by nonpartisan budget monitors indicates that the current debt level is merely a stepping stone toward much larger fiscal obligations. The CBO further projects that annual deficits will reach $3.1 trillion by 2036.
The US national debt has topped $40 trillion. But is that number as scary as it sounds? @KennethLFisher argues that “even mind-bogglingly big, round and seemingly unprecedented numbers are misleading without appropriate context.” Read his latest column in @nypost for a different…
The Social Security retirement trust fund is projected to run out in 2032, after which only 78 percent of scheduled benefits could be paid unless Congress intervenes. Defense officials and congressional staff are currently working on a smaller budget plan closer to $1.1 trillion, as GOP infighting in both chambers has already imperiled the odds of passing even one piece of the $1.5 trillion total,
according to Politico’s Mark Satter, Paul McLeary and Audrey Decker.
The broader global context adds further volatility. The Kobeissi Letter noted that the average debt-to-GDP ratio across advanced economies was 108.20 percent, with Germany being the only nation under 100 percent. The Kobeissi Letter remarked, The global debt crisis has never been worse,
adding that The world economy is drowning in debt.
Other warnings include billionaire investor Ray Dalio, who stated the U.S. faces a “death spiraldue to an oversupply of government debt, and economist Peter Schiff, who warned the government could be
forced into default” on its debt or commitments to private citizens, including Medicare and government pensions.
