As the federal government shutdown drags on, the U.S. national debt has reached a historic milestone — surpassing $38 trillion for the first time, according to new data released Wednesday by the Treasury Department.
According to The Associated Press, the latest report marks the fastest accumulation of $1 trillion in debt outside of the COVID-19 pandemic. The U.S. had already hit $37 trillion just two months ago, in August.
“This is the fastest pace of debt growth we’ve seen in decades,” said Kent Smetters, director of the Penn Wharton Budget Model at the University of Pennsylvania and a former Treasury official under President George W. Bush. He warned that “a growing debt load over time leads ultimately to higher inflation, eroding Americans’ purchasing power.”
The Government Accountability Office (GAO) has also sounded alarms over the mounting debt, warning that it could lead to higher borrowing costs for mortgages and car loans, lower wages, and higher prices for everyday goods and services.
“I think a lot of people want to know that their kids and grandkids are going to be in good, decent shape in the future — that they will be able to afford a house,” Smetters told the Associated Press. “That additional inflation compounds and erodes consumers’ purchasing power,” he added.
Despite the ballooning debt, the Trump administration insists its fiscal policies are slowing government spending and cutting the deficit.
“During his first eight months in office, President Trump has reduced the deficit by $350 billion compared to the same period in 2024 by cutting spending and boosting revenue,” White House spokesman Kush Desai said in a statement. He added that the administration remains focused on “robust economic growth, lower inflation, tariff revenue, lower borrowing costs and cuts to waste, fraud and abuse.”
The Treasury Department reported that from April to September, the federal deficit totaled $468 billion, the lowest reading since 2019. Treasury Secretary Scott Bessent highlighted the figure in a post on X, calling it “evidence that fiscal discipline is returning to Washington.”
Still, fiscal watchdogs remain deeply concerned. Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, called the $38 trillion figure “the latest troubling sign that lawmakers are not meeting their basic fiscal duties.”
“Along with increasing debt, you get higher interest costs, which are now the fastest growing part of the budget,” Peterson said. “We spent $4 trillion on interest over the last decade, but will spend $14 trillion in the next ten years. Interest costs crowd out important public and private investments in our future, harming the economy for every American.”
According to the Joint Economic Committee, the national debt has grown by roughly $69,713.82 per second over the past year.
The U.S. debt has continued to rise at a staggering pace — reaching $34 trillion in January 2024, $35 trillion in July, $36 trillion in November, and now $38 trillion in October 2025 — with no signs of slowing down.
