The U.S. government’s gross national debt surpassed $38 trillion on Wednesday, marking a historic record during a federal government shutdown. The Treasury Department’s latest report reveals the milestone was achieved amid ongoing fiscal challenges. The debt has grown at an unprecedented rate outside of the COVID-19 pandemic, reaching $37 trillion just this past August.
Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, stated that increasing debt leads to higher interest costs, which are now the fastest-growing component of the federal budget. “Along with increasing debt, you get higher interest costs, which are now the fastest growing part of the budget,” he noted. Experts warn that rising debt could result in increased borrowing costs and diminished purchasing power for Americans.
While short-term and long-term Treasury bond yields—key indicators of government debt costs—have declined significantly, the 10-Year Treasury yield has dropped nearly a full point since January 1, 2025. White House spokesman Kush Desai cited efforts by the Trump administration to reduce the deficit, stating that President Trump cut the deficit by $350 billion in his first eight months in office compared to the same period in 2024.
