US Gross National Debt Surpasses $38 Trillion

Amid a federal government shutdown, the United States’ gross national debt has crossed $38 trillion, setting an all-time high. This milestone represents the fastest accumulation of $1 trillion in debt outside of the COVID-19 pandemic, as the nation reached $37 trillion in August this year.

The figure comes from the latest Treasury Department report, which tracks the nation’s daily finances. These numbers highlight the ongoing challenge of managing government spending while maintaining fiscal stability.

Economic Implications of Rising Debt

Economists warn that the increasing debt load could have significant long-term consequences. Kent Smetters, from the University of Pennsylvania’s Penn Wharton Budget Model, said that growing debt can lead to higher inflation, which gradually erodes Americans’ purchasing power.

The Government Accountability Office (GAO) outlines the direct and indirect effects of rising debt, including:

• Higher borrowing costs for mortgages, car loans, and personal finance

• Lower wages, as companies have less money to invest in growth and hiring

• Higher prices for everyday goods and services

Smetters highlighted concerns for future generations: “A lot of people want to know that their kids and grandkids will be in decent financial shape and able to afford a house. Additional inflation compounds over time and erodes consumers’ purchasing power.”

Also Read: Global Funds Outperform Indian Equities

Deficit Reduction Efforts

Despite record debt levels, the Trump administration claims its policies are helping slow government spending. Treasury officials reported that the cumulative deficit from April to September totaled $468 billion, which Treasury Secretary Scott Bessent called the lowest reading since 2019.

White House spokesperson Kush Desai said:
“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. The administration will continue to pursue economic growth, lower inflation, increased tariff revenue, reduced borrowing costs, and cuts to waste, fraud, and abuse.”

Rapid Debt Growth

The Joint Economic Committee estimates that the US national debt has grown by $69,713.82 per second over the past year, underlining the speed at which borrowing is occurring.

Michael Peterson, CEO of the Peter G. Peterson Foundation, warned:
“Reaching $38 trillion in debt during a government shutdown is a troubling sign that lawmakers are not meeting their basic fiscal duties. Along with rising debt, interest costs — now the fastest-growing part of the budget — are projected to increase sharply. We spent $4 trillion on interest over the past decade and will spend $14 trillion in the next ten years, crowding out important public and private investments.”

Debt Milestones Over Recent Years

The US national debt has grown steadily over the past few years:

• $34 trillion in January 2024

• $35 trillion in July 2024

• $36 trillion in November 2024

• $37 trillion in August 2025

• $38 trillion in October 2025

This rapid climb underscores the challenge of balancing government spending with revenue collection, even amid efforts to reduce deficits.

What Rising Debt Means for Americans?

Increasing debt has real consequences for everyday Americans. Higher borrowing costs, inflation, and reduced investment in wages and public services can affect everyone—from first-time homebuyers to families managing day-to-day expenses. Experts caution that without effective fiscal measures, future generations may face higher living costs and reduced economic opportunities.

As the US reaches $38 trillion in debt during a government shutdown, policymakers and citizens alike are closely watching how fiscal policies will shape the nation’s economic future.

Click here to explore:
FII DII Data
IPO
BSE Sensex