Trump's promises falter as US debt tops $40 trillion
This digest was compiled by AI from multiple sources — links to the originals are below.
The US national debt has surpassed $40 trillion for the first time, with the budget deficit reaching 5.8% of GDP in fiscal 2025. The war with Iran has driven gasoline prices up 40% to $1.34 per liter and pushed 30-year mortgage rates to 6.65%. President Trump continues to claim the economy is thriving even as long-term Treasury yields hit a 19-year high.
Key Facts
- The US national debt reached $40 trillion for the first time, having grown fivefold over the past 20 years.
- The budget deficit for fiscal 2025 was 5.8% of GDP.
- Gasoline prices in the US rose 40% since the start of the war with Iran, reaching $1.34 per liter.
- The average 30-year mortgage rate climbed from 5.98% before the war to 6.65%.
- Annual economic growth in the second quarter of 2026 was only 1.5%.
Debt and Deficit
The US national debt surpassed $40 trillion for the first time, a fivefold increase over two decades. The debt stood at $8 trillion in 2006, $20 trillion in 2017, $30 trillion in 2022, and $40 trillion in 2026. The budget deficit reached 5.8% of GDP in fiscal 2025. KPMG US chief economist Diane Swonk said the country continues a high-spending trend, and the war has further increased costs.
War and Energy Prices
The war with Iran has sharply worsened the economic situation. Gasoline prices in the US rose 40% since the war began, reaching $1.34 per liter. Diesel prices climbed to $1.5 per liter, affecting freight transport. The average 30-year mortgage rate increased from 5.98% before the war to 6.65%.
Economic Growth and Political Pressure
Annual economic growth in the second quarter of 2026 was only 1.5%. The halt of Middle East oil shipments through the Strait of Hormuz, which normally carries 20 million barrels per day, effectively erased US production growth. President Trump points to record stock market levels as evidence that the US economy is thriving. Treasury Secretary Scott Bessent says there is still a chance to escape the debt hole through economic growth. Rising debt, inflation, expensive credit, and energy prices are increasing pressure on the Trump administration's economic policy ahead of the November midterm elections.
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Trump's promises falter as US debt tops $40 trillion
