US debt stands at $38 trillion, following the fastest $1 trillion accumulation outside the pandemic

WASHINGTON (AP) — In the midst of a federal government shutdown, the U.S. government’s total national debt surpassed $38 trillion on Wednesday, a record high that highlights the accelerating buildup of debt on the U.S. balance sheet.

It is also the fastest accumulation of $1 trillion in debt outside of the COVID-19 pandemic, with the total US national debt reaching $37 trillion in August of this year.

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The $38 trillion update is found in the latest Treasury Department report, which records the country’s day-to-day finances.

Kent Smetters, of the Penn Wharton budget model at the University of Pennsylvania, who served in the Treasury Department under President George W. Bush, told The Associated Press that a rising debt burden over time eventually leads to higher inflation, eroding Americans’ purchasing power.

The Government Accountability Office identifies some of the effects of higher government debt on Americans, including higher borrowing costs for things like mortgages and cars, lower wages from businesses that have less money to invest, and more expensive goods and services.

“I think a lot of people want to know that their children and grandchildren will be well and fit in the future — and that they will be able to afford a home,” Smetters said. “This additional inflation is compounding” and eroding consumers’ purchasing power, making it harder for future generations to achieve homeownership goals, he added.

The Trump administration says its policies help slow government spending and will work to reduce the country’s massive deficit. A new analysis by Treasury Department officials indicates that the cumulative shortfall from April to September totaled $468 billion. In a post on Wednesday, Treasury Secretary Scott Besent said this was the lowest reading since 2019.

“During his first eight months in office, President Trump reduced the deficit by $350 billion compared to the same period in 2024 by cutting spending and increasing revenues,” White House spokesman Khush Desai said in a statement, adding that the administration would pursue strong economic growth, lower inflation and tariff revenues, lower borrowing costs and cut waste, fraud and abuse.

The Joint Economic Commission estimates that the total national debt rose by $69,713.82 per second over the past year.

“Reaching $38 trillion in debt during the government shutdown is the latest troubling sign that lawmakers are not fulfilling their basic fiscal duties,” Michael Peterson, president and CEO of the Peter G. Peterson Foundation, said in a statement.

“Along with increased debt, you get higher interest costs, which is now the fastest-growing part of the balance sheet,” Peterson added. “We’ve spent $4 trillion on interest over the past decade, but we will spend $14 trillion in the next 10 years. Interest costs crowd out important public and private investments in our future, hurting every American’s economy.”

US debt reached $34 trillion in January 2024, $35 trillion in July 2024, and $36 trillion in November 2024.