The U.S. debt has officially surpassed $38 trillion, marking a historic milestone and signaling the fastest accumulation of $1 trillion outside the pandemic years. The new record, revealed in a Treasury Department report on Wednesday, underscores mounting concerns about America’s fiscal path as the federal government remains partially shut down.
The U.S. debt reached $37 trillion in August, meaning the country added another trillion dollars in just two months. This acceleration highlights the ongoing strain of high spending, interest costs, and slower revenue growth. Economists warn that such rapid borrowing could drive up inflation, weaken the dollar, and burden future generations with higher costs of living.
Experts Warn of Rising Costs and Inflation Pressure
According to Kent Smetters, a University of Pennsylvania economist and former Treasury official under President George W. Bush, the growing debt load will inevitably translate into higher inflation and eroded purchasing power.
“That additional inflation compounds,” Smetters said. “It makes it harder for Americans — and their children — to afford homes, cars, and other essentials.”
The Government Accountability Office (GAO) echoed these concerns, noting that the rising national debt can lead to higher borrowing costs on mortgages, car loans, and credit cards. Businesses may also face tighter investment conditions, reducing wage growth and productivity.
Treasury Defends Fiscal Outlook Amid Criticism
Treasury Secretary Scott Bessent defended the administration’s fiscal policies, asserting that President Trump’s team is taking steps to curb spending and stimulate economic growth. Speaking at the White House, Bessent emphasized that deficit reduction remains a top priority even amid global economic uncertainty.
According to Treasury data, the federal deficit from April to September totaled $468 billion, the lowest reading since 2019. The White House attributes this to lower discretionary spending, stronger tariff revenues, and improved tax collection.
“During his first eight months in office, President Trump has reduced the deficit by $350 billion compared to the same period in 2024,” White House spokesman Kush Desai said. “Our focus is on sustainable growth, lower inflation, and responsible borrowing.”
Still, critics argue that deficit improvement does little to offset the long-term impact of a $38 trillion national debt. The Joint Economic Committee estimates the debt has been growing by roughly $69,700 per second over the past year.
Fiscal Warnings Grow Louder
Fiscal watchdogs say the record reflects a systemic failure by Congress and the administration to align spending with revenue. Michael Peterson, CEO of the Peter G. Peterson Foundation, called the milestone “a troubling sign that lawmakers are not meeting their basic fiscal duties.”
“With increasing debt, interest costs are now the fastest-growing part of the budget,” Peterson said. “The U.S. spent $4 trillion on interest over the past decade but is projected to spend $14 trillion over the next ten years.”
Peterson warned that rising interest costs “crowd out” crucial public investments such as infrastructure, education, and research — weakening long-term economic competitiveness.
A Rapid Climb in Debt
The pace of debt accumulation has quickened dramatically. The U.S. crossed:
- $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
Economists point out that while pandemic-era stimulus programs accelerated borrowing, today’s surge is driven largely by structural deficits — ongoing imbalances between spending and tax revenues.
Looking Ahead
As the government shutdown continues, policymakers face renewed pressure to address long-term debt sustainability. Experts stress that reforms to entitlement programs, healthcare spending, and tax policy are essential to curb borrowing growth.
Without action, analysts warn, the U.S. debt trajectory could lead to sustained inflation, higher interest rates, and reduced global investor confidence in U.S. Treasury securities — the cornerstone of international finance.
For now, the $38 trillion figure stands as both a symbol of economic resilience and a warning sign of fiscal vulnerability. The question confronting Washington is not whether the debt can be managed, but how much longer the United States can afford to delay tough choices.
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