Record Debt Milestone Reached During Shutdown
Amid a federal shutdown, the U.S. gross national debt has officially surpassed $38 trillion, according to Treasury Department data released Wednesday. It marks the fastest $1 trillion increase in peacetime history, having taken just two months to jump from $37 trillion in August.
The Treasury’s daily fiscal report showed a continued acceleration of borrowing—an alarming signal as the country grapples with persistent inflation, higher interest payments, and growing pressure on future federal budgets.
Economic Impact: Higher Costs, Lower Growth
Experts warn the rising debt has serious consequences. Kent Smetters, a former Treasury official and director of the Penn Wharton Budget Model, noted that the long-term effect of high debt includes:
- Higher borrowing costs on mortgages, car loans, and credit
- Lower wages due to reduced business investment
- Rising prices from inflation eroding purchasing power
“That additional inflation compounds and makes it less possible for future generations to afford homes,” Smetters said.
The Government Accountability Office (GAO) has echoed these concerns, warning that elevated interest payments are already crowding out public and private investment.
Trump Administration: Claims of Fiscal Improvement
Despite the debt surge, the Trump administration claimed it is reversing course on excessive spending. The White House stated that President Trump had reduced the federal deficit by $350 billion in his first eight months compared to the same period in 2024.
Treasury Secretary Scott Bessent said the deficit from April through September was $468 billion, reportedly the lowest since 2019.
White House officials credited this reduction to a combination of spending cuts, tariff revenue, and increased tax receipts.
$38 Trillion and Counting: Alarming Growth Rate
The national debt continues to climb at a staggering rate of $69,714 per second, according to the Joint Economic Committee. That pace has only quickened with the shutdown disrupting normal congressional oversight and budget reform efforts.
Michael Peterson, CEO of the Peterson Foundation, warned that interest on the debt is now the fastest-growing item in the federal budget. The U.S. spent $4 trillion in interest over the last decade and is projected to spend $14 trillion over the next 10 years.
“That kind of spending leaves less room for defense, infrastructure, or tax relief,” Peterson said.
Recent Milestones in U.S. Debt
| Date | Debt Level |
|---|---|
| Jan 2024 | $34 trillion |
| Jul 2024 | $35 trillion |
| Nov 2024 | $36 trillion |
| Aug 2025 | $37 trillion |
| Oct 2025 | $38 trillion |
Related Coverage
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