The United States has crossed a historic financial threshold, with gross national debt surpassing $38 trillion this week, according to the latest Treasury Department report. The milestone comes during a federal government shutdown and marks the fastest accumulation of $1 trillion in debt outside of the COVID-19 pandemic, with the total rising from $37 trillion in August to $38 trillion by October.
Economists warn that the rapid growth of debt poses long-term risks for American households. Kent Smetters, director of the Penn Wharton Budget Model and a former Treasury official, explained that sustained debt growth ultimately fuels higher inflation, which steadily erodes purchasing power. He cautioned that this trend makes it harder for future generations to achieve financial milestones such as home ownership.
The Government Accountability Office has outlined several consequences of rising national debt. These include higher borrowing costs for mortgages, car loans, and other credit, lower wages as businesses scale back investment, and increased prices for goods and services. Together, these pressures could weigh heavily on both current and future consumers.
Despite the record debt, the administration has pointed to signs of improvement in the federal deficit. Treasury officials reported that from April through September, the cumulative deficit stood at $468 billion, the lowest level since 2019. Treasury Secretary Scott Bessent highlighted the figure in a post on X, saying it reflects progress in slowing government spending.
Still, the broader picture underscores the scale of the challenge. With debt now exceeding $38 trillion, each American’s share amounts to well over $100,000. Analysts note that while short-term deficit reductions may ease fiscal pressure, the overall trajectory of debt growth remains steep, raising questions about long-term economic stability.
The debate over how to manage the debt is expected to intensify as policymakers weigh the competing demands of fiscal discipline, economic growth, and social spending. For many Americans, however, the immediate concern is more personal: whether rising debt and inflation will leave their children and grandchildren in a weaker financial position than generations before.
Tags: US national debt 2025, US debt $38 trillion, Treasury Department debt report, US deficit 2025, Scott Bessent Treasury Secretary, government shutdown debt, US inflation debt impact, US borrowing costs, US economic stability, US debt accumulation
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