U.S. National Debt Surpasses $38.7 Trillion Amidst Spending Concerns

Despite claims of fiscal responsibility, the U.S. National debt continues to climb, recently exceeding $38.7 trillion as of February 17, 2026. This rapid increase, fueled by ongoing government spending, raises concerns about long-term economic stability and potential fiscal crises.

Debt Growth Accelerates

The national debt surpassed $38 trillion in October 2025, and has continued to grow at an alarming rate. Just since the beginning of 2026, the debt has ballooned by $300 billion, with a staggering $145.7 billion added in January alone – roughly $50 billion per day.

For context, the debt reached $34 trillion in January 2024 and $35 trillion in November 2024. It took 188 days for the debt to grow from $35 trillion to $36 trillion, and another 265 days to reach $37 trillion. The pace has clearly accelerated.

The Impact of the Debt Ceiling and “Big Beautiful Bill”

While the debt ceiling posed a temporary constraint, the enactment of the “Big Beautiful Bill” in July 2025, which raised the debt ceiling by $5 trillion, allowed the government to resume borrowing. Within two months of its passage, the federal government borrowed over $800 billion, pushing the debt above $37 trillion.

Tariff Revenue and Deficit Reduction

Record levels of federal revenue, largely due to increased tariff receipts, have partially offset the growing debt. Through the first four months of fiscal year 2026, the deficit has been reduced by 20 percent, to $697 billion, compared to $841.6 billion during the same period in fiscal year 2025. However, this reduction hasn’t eliminated the deficit entirely.

A Spending Problem

Despite the increase in revenue, the federal government continues to spend more than it takes in. Total federal spending through the first four months of fiscal year 2026 reached $2.48 trillion, a 2 percent increase. Analyst Greg Weldon points to a structural mismatch between government spending and revenues.

CBO Deficit Projections

The Congressional Budget Office (CBO) has recently increased its deficit projections by $1.4 trillion over the next 10 years. The CBO forecasts a $1.9 trillion deficit in fiscal year 2026, rising to $3.1 trillion annually by 2036. This represents approximately 5.8 percent of GDP, increasing to 6.7 percent in 10 years – significantly higher than the historical average of 3.8 percent.

Economic Consequences of High Debt

A large national debt can hinder economic growth. With the current debt representing 124.2 percent of GDP, studies suggest that a debt-to-GDP ratio exceeding 90 percent can reduce economic growth by approximately 30 percent.

Interest payments on the national debt are also a significant burden. In fiscal year 2025, interest costs totaled $1.2 trillion, exceeding spending on national defense ($917 billion) and Medicare ($997 billion). The largest expenditure remains Social Security ($1.58 trillion).

Risk of Losing Investor Confidence

There is a growing concern that international investors may lose confidence in the U.S. Government’s ability to manage its debt. The Bipartisan Policy Center warns that mounting fiscal irresponsibility could undermine the dollar’s standing.

Federal Reserve and Quantitative Easing

The Federal Reserve’s recent resumption of quantitative easing (QE) is partly driven by the need to support the government’s borrowing. By purchasing Treasury bonds, the Fed creates demand and helps preserve interest rates lower, allowing the government to borrow more easily. However, this can contribute to inflation.

The Inevitability of a Crisis?

While warnings about the national debt have persisted for decades without an immediate crisis, the situation is becoming increasingly precarious. The Debt Black Hole, as some analysts describe it, is growing in size and power. The risk remains that a crisis could emerge, potentially triggered by a loss of investor confidence or an inability to manage rising interest costs.