Facing the $40 Trillion Debt Crisis: Vance Reveals Trump Administration Is Executing a 'Secret Economic Mission'

As U.S. federal government debt surpassed $40 trillion, Vice President JD Vance stated that the Trump administration has proposed a response strategy aimed at growing the U.S. economy faster than the rate of national debt increase. Vance revealed that Treasury Secretary Scott Bessent is advancing a 'very low-key' plan, supported by President Trump, to gradually improve the problem of rapidly expanding U.S. debt by boosting economic growth.

On the 21st, Vance was interviewed by Newsmax and asked about the continuous rise in U.S. national debt and the pressure high debt levels are placing on the U.S. bond market. Vance said American taxpayers are currently being affected by high government borrowing costs, which he described as a major fiscal problem inherited by the Trump administration upon taking office.

'American taxpayers are being exploited in a strange way by extremely high debt expenses,' Vance said. He then attributed the problem to the high government debt accumulated during former President Biden's term, stating that the Trump administration inherited a 'crisis,' though the situation has since improved.

U.S. National Debt Surpasses $40 Trillion for the First Time

According to data from the U.S. Department of the Treasury, as of the 20th, cumulative federal government debt exceeded $40.01 trillion, officially surpassing the $40 trillion mark.

Of this, approximately $32.27 trillion is classified as 'debt held by the public'—debt owned by U.S. individuals, corporations, financial institutions, state and local governments, the Federal Reserve, and foreign investors. The remainder consists primarily of intragovernmental debt held between different federal departments and federal trust funds.

U.S. national debt has continuously expanded over the past several decades, particularly accelerating during financial crises, the pandemic, and periods of large-scale government fiscal spending. As debt levels rise, so too does the interest the government must pay, placing increasing pressure on the federal budget.

An analysis released earlier this month by the U.S. Congress Joint Economic Committee indicated that U.S. national debt increased by approximately $2.88 trillion over the previous year. Meanwhile, the average yield on U.S. marketable Treasury debt rose to 3.44% in July of this year, significantly higher than 1.48% five years ago.

This means that even if the government does not significantly increase borrowing, existing debt may face higher interest costs when refinanced. With both debt levels and average borrowing rates rising, federal government interest payments are becoming an increasingly heavy fiscal burden.

Vance: Bessent Has a 'Very Low-Key' Plan

Facing the milestone of $40 trillion in national debt, Vance said Treasury Secretary Bessent is handling the issue and has been authorized by President Trump to take action.

Vance stated: 'This very capable Treasury Secretary, Scott Bessent, has a very low-key plan—fully supported by the President of the United States—to put America into a state where economic growth outpaces debt growth.'

He added that, based on current conditions, the U.S. is moving in that direction.

Vance emphasized that the Trump administration is not focused solely on the absolute amount of debt, but rather on the relative growth rates between national economic output and government debt.

He said the Trump administration inherited an economic environment where 'debt growth outpaced GDP growth,' which is precisely the issue the government aims to reverse.

'We do have a plan to grow the economy faster than debt grows, and that is the most important thing,' Vance said.

However, Vance did not disclose the specific details of the plan Bessent is advancing, nor did he reveal which fiscal, economic, or investment policies the government will use to achieve the goal of economic growth outpacing debt growth.

Trump Administration Considering a Sovereign Wealth Fund

During the interview, Vance also mentioned that the Trump administration has discussed establishing a 'sovereign wealth fund,' though he did not clarify whether this idea is directly related to the plan Bessent is currently advancing.

A sovereign wealth fund is typically owned or controlled by a nation, investing government-accumulated fiscal surpluses, foreign exchange reserves, or other national assets to pursue long-term returns. If the U.S. were to establish a similar mechanism, it could involve questions about how federal government assets, investment returns, and other resources would be used.

The Trump administration has previously proposed the idea of creating a U.S. sovereign wealth fund, sparking external interest in how the government might utilize public assets, invest in markets, and manage risks.

However, Vance did not provide specific details on the potential fund’s scale, funding sources, investment targets, or timeline, making it difficult to assess its potential role in addressing the U.S. federal debt problem.

High Interest Costs Are a New Fiscal Pressure on the U.S.

Another core aspect of the U.S. government debt issue is that interest expenses are being driven upward by both rising interest rates and increasing total debt.

When the U.S. government issues new debt or refinances maturing bonds, if market interest rates are higher than the rates when the original bonds were issued, the government must pay more in interest. As large volumes of debt issued during low-interest periods mature and are reissued, higher rates may gradually be reflected in the overall interest costs of federal debt.

Vance believes American taxpayers are already bearing this burden.

He pointed out that high debt interest payments required by the U.S. government effectively crowd out other government spending and force taxpayers to shoulder higher fiscal costs.

Vance described this as the 'debt bomb' the Trump administration inherited and said the government is now trying to address it.

Both Trump and Biden Administrations Increased Borrowing Significantly

Vance linked the current U.S. debt situation to fiscal policies during the Biden administration, but the sharp increase in U.S. federal debt is not a phenomenon unique to a single administration.

A 2024 analysis by the nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated that policies enacted during Trump’s first term would add approximately $8.4 trillion in borrowing over ten years. In contrast, policies under Biden through early 2024—over 3 years and 5 months—were estimated to add about $4.3 trillion in 10-year borrowing.

Excluding large-scale COVID-19 relief measures, CRFB estimated that Trump’s first-term policies added about $4.8 trillion in 10-year borrowing, while Biden’s administration added about $2.2 trillion.

However, CRFB also cautioned that simply comparing how much national debt increased during a president’s term does not directly equate to how much new debt was caused by that president’s policies.

This is because federal government debt is influenced not only by new legislation passed by the current administration but also by pre-existing laws that remain in effect, as well as economic conditions, interest rates, wars, financial crises, and other factors beyond full government control.

Therefore, the amount of debt increase during a president’s term cannot be simply equated with the amount of new borrowing directly caused by that president’s policies.

Vance: The Trump Administration Is Addressing Debt Daily

Vance stated that regardless of how high the current U.S. debt level is, the Trump administration has made reversing the trend of 'debt growing faster than the economy' a key policy goal.

'The problem during the Biden administration—and one we’re still dealing with now—is that debt growth has outpaced U.S. GDP growth,' Vance said.

He said this is precisely the issue and one the Trump administration is 'correcting every day.'

Vance also emphasized that Bessent fully understands the severity of the U.S. debt problem and has been fully authorized by President Trump to take action.

'He knows this is a problem, and he has been authorized by the president to act,' Vance said.

Currently, the Trump administration has not publicly released Bessent’s full proposal, so it remains to be seen how the policy goal of growing the economy faster than debt will be achieved—whether through spending cuts, economic growth, increased revenue, lower borrowing costs, use of public assets, or other fiscal and economic policies.