Here's how America's $40 trillion debt can hit your wallet
The U.S. national debt this week topped $40 trillion, raising fresh concerns about how rising federal borrowing could affect Americans' finances.
Why it matters: Americans don't personally owe the national debt, but rising debt could pressure lawmakers to raise taxes, cut spending or change federal benefits.
State of play: The gross federal debt hit $40 trillion for the first time on Wednesday.
That figure includes debt the government owes itself.
Economists usually focus on the roughly $32 trillion held by the public when assessing how debt affects the economy.
President Trump's tax-and-spending law is projected to add trillions to federal deficits over the next decade, while the White House has sought tens of billions of dollars in additional funding tied to the Iran war.
Loans can get more expensive Higher national debt could make mortgages, student loans and small-business borrowing more expensive by putting upward pressure on interest rates, according to a new report from the Conference Board, a nonprofit think tank.
The big picture: As U.S. debt grows, investors could demand higher yields if they become less confident in the government's fiscal position.
"If investors begin to view U.S. debt as riskier, interest rates could rise further, increasing borrowing costs for expansion, hiring, and investment," the Conference Board report says.
How it works: Mortgage rates , for example, tend to move closely with the yield on the 10-year Treasury note, which reflects the return investors demand to lend money to the federal government, says Brett Loper, executive vice president for policy at the fiscal think tank Peter G.
Peterson Foundation.
When Treasury yields rise, mortgage rates tend to rise, too.
"If it is costing more and more for the government to borrow ... it's going to push up mortgage rates," he says.
Loper says higher government borrowing costs can filter through to auto loans, bonds that finance school construction and other forms of borrowing.
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