U.S. Debt Hits $38 Trillion Amid Urgent Government Shutdown

URGENT UPDATE: The U.S. government’s gross national debt has skyrocketed to a staggering $38 trillion as of Wednesday, coinciding with an ongoing federal government shutdown. This alarming milestone marks the fastest accumulation of a trillion dollars in debt outside the COVID-19 pandemic, with the debt reaching $37 trillion just in August 2023, according to the latest report from the Treasury Department.

As the nation grapples with this unprecedented financial burden, experts warn of dire consequences for American families. Kent Smetters, a former official in President George W. Bush’s Treasury Department and now with the University of Pennsylvania’s Penn Wharton Budget Model, states that such a growing debt load inevitably leads to higher inflation, diminishing the purchasing power of everyday Americans.

The Government Accountability Office highlights that rising government debt impacts Americans in several ways, including increased borrowing costs for mortgages and loans, lower wages due to reduced business investments, and more expensive goods and services. Smetters expressed concerns for future generations, stating, “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.”

Adding to the urgency, Moody’s recently stripped the U.S. government of its top credit rating, citing Washington’s failure to control mounting debt.

In a contrasting view, the Trump administration argues that its policies are curbing government spending and reducing the deficit. The Treasury Department reports a cumulative deficit of $468 billion between April and September 2023, the lowest since 2019. White House spokesman Kush Desai claimed, “During his first eight months in office, President Trump has reduced the deficit by $350 billion compared to the same period in 2024.”

However, the Joint Economic Committee reveals that the national debt has surged by $69,713.82 per second over the past year. Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, emphasized the gravity of the situation, stating, “Reaching $38 trillion in debt during a government shutdown is the latest troubling sign that lawmakers are not meeting their basic fiscal duties.” He warned that soaring interest costs, which have become the fastest-growing part of the budget, threaten critical public and private investments, ultimately harming the economy for every American.

The U.S. debt reached $34 trillion in January 2024, $35 trillion in July 2024, and $36 trillion in November 2024. As the government shutdown continues, the implications of this rising debt on future economic stability remain a critical concern for policymakers and citizens alike.

Next steps include monitoring how lawmakers address the shutdown and the broader implications of the soaring debt, as the nation braces for potential economic ramifications that could affect millions of families across the country.