Under Middle East Conflict, U.S. Federal Debt Breaks 39 Trillion Dollars for the First Time

On Wednesday, the total U.S. national debt surpassed a historic high of $39 trillion, coinciding with just weeks after the U.S.-Israel coalition launched an attack on Iran.

New data released by the U.S. Treasury Department on Wednesday shows that as of March 17, the total federal debt reached $39,016,762,910,245.14.

This milestone of surpassing $39 trillion comes just about five months after the total reached $38 trillion in late October 2025; prior to that, in mid-August last year, the figure had just crossed $37 trillion.

This unprecedented number highlights the conflicting priorities within the U.S. government: from passing large-scale tax laws, increasing defense spending, and strengthening immigration enforcement, to reducing the debt itself — a goal that Trump promised during his campaign and after taking office.

As the population ages and federal spending on Social Security and Medicare increases, the U.S. national debt has grown rapidly over the past decade. Another key driver of the debt surge is interest payments on the debt, which have risen sharply due to rising interest rates aimed at curbing inflation and the growth of the debt itself.

Michael A. Peterson, CEO of the nonpartisan Peterson Foundation, said that reaching this new milestone in national debt offers Americans an opportunity to “recognize the shocking speed of this growth and the heavy financial burden we are passing on to future generations.”

As shown in the chart below, over the past nearly 20 years, federal debt has surged during both Republican and Democratic presidencies, with recent increases mainly driven by wars, large-scale pandemic response spending, and tax cuts.

For example, recent “big spending” includes the Middle East conflict. White House economic advisor Kevin Hasset estimated on Sunday that the Iran war has already cost the U.S. over $12 billion so far. It’s unclear when this war will end. Additionally, a report released on the 5th by the Center for Strategic and International Studies estimates that U.S. military costs during the first 100 hours of operations amounted to $3.7 billion, or about $890 million per day.

According to CCTV International News citing The Washington Post, the U.S. Department of Defense has requested the White House to approve a budget of over $200 billion from Congress for the Iran war.

Could it rise to $40 trillion before the midterm elections?

The independent Government Accountability Office (GAO) has outlined some impacts of rising government debt on Americans — including higher borrowing costs for mortgages and car loans, reduced corporate investment leading to lower wages, and rising prices for goods and services.

Proponents of balanced budgets also warn that the ongoing expansion of borrowing and rising interest payments could force Americans to face tougher fiscal choices in the future.

Peterson pointed out, “At the current rate of growth, our national debt will reach an astonishing $40 trillion before the midterm elections this fall. Borrowing trillions upon trillions at this rapid pace without any plan — that’s the very definition of ‘unsustainable.’”

He further stated that, given voters’ concerns about living costs, the costs of debt and its economic impact on Americans’ livelihoods should become key topics in this year’s midterm debates.

“America faces complex and serious challenges domestically and internationally. Putting debt on a sustainable path will help build a stronger, safer future. The good news is that there are many solutions available, and all should be discussed during this election season,” Peterson added.

With increased spending on Social Security, Medicare, and debt servicing costs, the U.S. federal government is expected to continue facing fiscal headwinds in the coming years, with budget deficits likely to further expand.

The nonpartisan Congressional Budget Office (CBO) previously released a ten-year budget and economic outlook, projecting that the annual budget deficit will rise from the current approximately $1.9 trillion to $3.1 trillion per year in ten years. This would push the total national debt from about $39 trillion now to $63 trillion by 2036.

The share of debt held by the public as a percentage of Gross Domestic Product (GDP)—a metric economists prefer to measure a country’s debt relative to its economic size—will rise from about 100% this year to 108% in 2030, and further to 120% in 2036. These figures would break the 1946 record of 106%, when the U.S. was transitioning from wartime to peacetime after World War II.

(Source: Cailian Press)