US national debt hits $38 trillion for the first time

Amid the federal government shutdown, U.S. gross national debt exceeded $38 trillion on Wednesday, setting a new record and underscoring the rapid accumulation of liabilities on America’s balance sheet.

The milestone also marks the fastest non-pandemic-related rise of a trillion dollars in the debt — the U.S. crossed $37 trillion just in August of this year.

The $38 trillion figure comes from the latest Treasury Department daily finance report.

Kent Smetters of the University of Pennsylvania’s Penn Wharton Budget Model, who previously served in the Treasury Department, said that mounting debt over time ultimately increases inflation, which erodes Americans’ purchasing power.

The Government Accountability Office (GAO) lists some consequences of rising government debt for households: higher borrowing costs for mortgages and cars; lower wages as firms have less money to invest; 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 said. “That additional inflation compounds,” he added, making it harder for future generations to reach home-ownership goals.

The administration says its policies are helping to curb government spending and shrink the nation’s large deficit. According to Treasury Department figures, the cumulative deficit from April to September was $468 billion, the smallest since 2019. A White House spokesman said that during his first eight months, the President has reduced the deficit by $350 billion year-on-year via lower spending and higher revenue.

The Joint Economic Committee estimates that the national debt has grown by roughly $69,714 per second over the last year.

Peter G. Peterson Foundation Chair and CEO Michael Peterson warned that reaching $38 trillion during a government shutdown is a stark indication that lawmakers are not fulfilling their basic fiscal obligations. He emphasised that, together with the mounting debt, there are rising interest costs—which are now the fastest-growing part of the budget. Over the past decade the U.S. spent about $4 trillion on interest; over the next ten years it is projected to spend around $14 trillion. He noted that these interest payments crowd out vital public and private investments in the future, harming the economy for all Americans.

The debt trajectory shows that the U.S. hit $34 trillion in January 2024, $35 trillion in July 2024, $36 trillion in November 2024, and $37 trillion in August 2025.