Debt Crisis Deepens: U.S. National Debt Soars Past $38 Trillion Amid Government Shutdown

The U.S. national debt has officially surpassed $38 trillion, according to the latest report from the Treasury Department released on Wednesday. The new record, reached amid an ongoing federal government shutdown, highlights the growing urgency of the country’s fiscal challenges.

This marks one of the fastest $1 trillion increases in the debt outside of the pandemic years. The total had only reached $37 trillion in August 2025, following steady jumps from $34 trillion in January 2024 to $36 trillion by that November. The pace of borrowing continues to accelerate, deepening concerns about long-term financial stability.

Economist Kent Smetters, a former Treasury official now at the Penn Wharton Budget Model, warned that persistent growth in federal debt could eventually feed inflationary pressures and reduce household purchasing power. The Government Accountability Office (GAO) has also cautioned that expanding debt burdens can lead to higher borrowing costs for consumers, smaller wage gains as businesses face tighter investment conditions, and higher prices across the economy. Smetters added that such trends could make it increasingly difficult for younger Americans to achieve financial milestones such as homeownership.

Observers have noted the symbolism of the record being reached during a shutdown, viewing it as another sign of fiscal dysfunction in Washington. Michael Peterson, CEO of the Peter G. Peterson Foundation, described the moment as evidence that lawmakers are neglecting their basic fiscal duties. He also highlighted the rapid rise in interest costs, now the fastest-growing category of federal spending. Over the past decade, interest payments totaled about $4 trillion, but projections indicate they could climb to $14 trillion in the next ten years. These mounting obligations, Peterson warned, threaten to divert resources away from productive investments that could strengthen the economy.

The Joint Economic Committee estimated that the national debt has been increasing at a rate of roughly $69,700 per second over the past year, underscoring the speed of the fiscal deterioration.

Officials from the Trump administration have defended their fiscal record, arguing that new policies are beginning to reduce the deficit. Treasury Secretary Scott Bessent announced on X that the deficit from April through September totaled $468 billion, the smallest figure since 2019. White House spokesperson Kush Desai added that President Trump cut the deficit by about $350 billion in his first eight months in office compared with the same period a year earlier, attributing the progress to lower spending, increased revenues, and efforts to eliminate inefficiency and fraud. Desai also said the administration remains focused on supporting economic growth, keeping inflation low, reducing borrowing costs, and maintaining fiscal discipline.