Bad News on the National Debt

In the midst of a federal government shutdown, the US government's gross national debt surpassed $38 trillion Wednesday, a record number that highlights the accelerating accumulation of debt on America's balance sheet, the AP reports. It's also the fastest accumulation of a trillion dollars in debt outside of the COVID-19 pandemic—the US hit $37 trillion in gross national debt in August this year. (The US hit $34 trillion in debt in January 2024, $35 trillion in July 2024, and $36 trillion in November 2024.) The $38 trillion update is found in the latest Treasury Department report, which logs the nation's daily finances.

Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model, who served in President George W. Bush's Treasury Department, told the Associated Press that a growing debt load over time leads ultimately to higher inflation, eroding Americans' purchasing power and making it less possible for future generations to achieve home ownership goals. The Government Accountability Office outlines some of the impacts of rising government debt on Americans—including higher borrowing costs for things like mortgages and cars, lower wages from businesses having less money available to invest, and more expensive goods and services.

The Joint Economic Committee estimates that the total national debt has grown by $69,713.82 per second for the past year. Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, said in a statement that "reaching $38 trillion in debt during a government shutdown is 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 added. "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."