The United States has crossed a historic milestone, with its gross national debt exceeding $38 trillion on Wednesday, highlighting a rapid acceleration in federal borrowing. This marks the fastest accumulation of a trillion dollars in debt outside of the COVID-19 pandemic, following the nation hitting $37 trillion in August 2025. The surge comes amid ongoing federal government shutdowns, raising concerns over the long-term economic impact on Americans.
The Treasury Department’s latest report, which tracks daily federal finances, underscores the relentless rise in the nation’s debt load. Experts warn that the growing debt has significant consequences for the economy. Kent Smetters, from the University of Pennsylvania’s Penn Wharton Budget Model and former Treasury Department official under President George W. Bush, noted that sustained debt growth can fuel higher inflation, eroding consumers’ purchasing power and affecting future generations’ ability to achieve milestones such as home ownership.
The Government Accountability Office has highlighted several impacts of escalating debt, including increased borrowing costs for mortgages and auto loans, reduced wages as businesses have less capital for investment, and higher prices for goods and services. “Additional inflation compounds and erodes consumers’ purchasing power,” Smetters emphasized.
Despite the alarming numbers, the Trump administration has argued that its fiscal policies are curbing government spending and reducing the deficit. According to Treasury data, the cumulative deficit from April to September 2025 totaled $468 billion, the lowest figure since 2019. Treasury Secretary Scott Bessent highlighted that policies in the first eight months of the administration have reduced the deficit by $350 billion compared to the same period in 2024, through a combination of spending cuts and revenue enhancements.
Still, concerns remain about long-term fiscal sustainability. The Joint Economic Committee estimates that US debt has grown by approximately $69,713 per second over the past year. Michael Peterson, chair of the Peter G. Peterson Foundation, warned that with interest costs set to rise sharply—from $4 trillion over the past decade to a projected $14 trillion over the next ten years—essential public and private investments could be crowded out, hampering economic growth and future prosperity.
The debt trajectory has been steep: the US reached $34 trillion in January 2024, $35 trillion in July 2024, and $36 trillion by November 2024, illustrating the relentless pace of federal borrowing and its potential ramifications for the broader economy.
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