Record Debt Growth Raises Concerns Over Fiscal Stability
The U.S. national debt has surpassed $38 trillion for the first time, according to new data from the Treasury Department — a historic milestone reached amid a prolonged government shutdown that has stalled economic activity and left hundreds of thousands of federal employees without pay.
The shutdown is compounding fiscal challenges by delaying government operations and economic output. The Office of Management and Budget estimated that a similar 2013 shutdown cost taxpayers $2 billion in lost productivity. Economists warn that the combination of rising debt and halted government functions reflects a growing inability of lawmakers to manage the nation’s finances responsibly.
“Reaching $38 trillion in debt during a government shutdown is the latest troubling sign that lawmakers are not meeting their basic fiscal duties,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation. “If it seems like we are adding debt faster than ever, that’s because we are.”
Debt Rising at an Unprecedented Pace
The federal debt has accelerated sharply in recent years, growing by $1 trillion every few months. The U.S. reached $34 trillion in January 2024, $35 trillion in July, and $36 trillion by November — before adding two more trillion in less than a year.
The debt represents the total amount the government owes, while the deficit refers to the yearly shortfall between spending and revenue. Mounting deficits continue to drive the total debt higher, as interest costs balloon and spending on entitlement programs expands.
According to the Peterson Foundation, interest payments on the national debt are projected to surge from $4 trillion over the past decade to $14 trillion over the next ten years, limiting government flexibility and crowding out private investment.
Warnings From Economists and Credit Agencies
Economists caution that rising debt threatens the nation’s long-term economic security. “Over time, this level of borrowing leads to higher interest costs and undermines investor confidence,” said David Kelly, chief global strategist at J.P. Morgan Asset Management.
Moody’s downgraded the U.S. credit rating in May from Aaa to Aa1, following similar moves by Standard & Poor’s and Fitch Ratings. The downgrades reflect growing unease among investors about Washington’s inability to control spending or pass timely budgets.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, warned that the nation is becoming “distressingly numb” to its fiscal dysfunction. “We fail to pass budgets, blow past deadlines, and haggle over fractions of a budget while leaving the largest drivers untouched,” she said, referencing the looming insolvency of Social Security and Medicare trust funds within seven years.
Economic and Consumer Impact
Rising debt ultimately hits consumers through higher inflation and reduced purchasing power. “That additional inflation compounds and erodes consumers’ ability to afford essentials like housing,” said Kent Smetters, a professor of business economics at the University of Pennsylvania and former Treasury official.
Despite the record debt, the Trump administration maintains that it is making progress in reducing the deficit. Treasury data show that from April to September, the U.S. deficit totaled $468 billion — the lowest since 2019. “President Trump has reduced the deficit by $350 billion compared to the same period in 2024,” said White House spokesman Kush Desai, citing spending cuts and revenue gains.
Still, with interest costs mounting and key programs under strain, economists warn that the U.S. may soon face difficult fiscal choices to restore stability and prevent future economic fallout.