What's Happening?
The United States national debt has reached a historic milestone, surpassing $38 trillion for the first time. This development comes as the federal government continues to accumulate debt at an unprecedented
pace. According to the Treasury Department, the gross national debt was recorded at $38,019,813,354,700.26 as of October 21, 2025. The rapid increase in debt is attributed to several factors, including higher interest rates aimed at curbing inflation and increased spending on entitlement programs such as Social Security and Medicare. Michael A. Peterson, CEO of the Peter G. Peterson Foundation, highlighted the troubling nature of this milestone, especially during a government shutdown, indicating that lawmakers are failing to address fiscal responsibilities. The Congressional Budget Office projects that the national debt held by the public will rise from approximately 100% of GDP in 2025 to 120% by 2035.
Why It's Important?
The surpassing of the $38 trillion mark in national debt has significant implications for the U.S. economy and public policy. High interest costs associated with servicing the debt are expected to crowd out essential public and private investments, potentially harming economic growth and stability. The projected increase in debt could lead to higher borrowing costs for consumers, affecting mortgages and car loans, and may also impact wages and the overall cost of living. As the debt continues to grow, policymakers face mounting pressure to implement long-term fiscal reforms to manage the economic impact and ensure sustainable growth. The rising debt levels could also influence future government spending priorities, with interest payments potentially taking precedence over other critical investments.
What's Next?
Looking ahead, the Congressional Budget Office forecasts that annual budget deficits will rise to about $2.6 trillion by 2035, adding $22.7 trillion to the national debt over the next decade. Federal spending is projected to total $88 trillion, or 23.6% of GDP, while tax revenue is expected to be over $65 trillion, or 17.5% of GDP. These projections indicate that the government will need to address the imbalance between spending and revenue to prevent further escalation of the debt crisis. Stakeholders, including lawmakers and economic policymakers, will likely engage in discussions to explore potential solutions, such as fiscal reforms and adjustments to entitlement programs, to mitigate the impact of rising debt levels.
Beyond the Headlines
The growing national debt raises ethical and policy questions about intergenerational equity and the burden placed on future generations. As interest payments consume a larger portion of the federal budget, there may be less room for investments in infrastructure, education, and healthcare, which are crucial for long-term economic prosperity. The debt crisis also underscores the need for bipartisan cooperation to address fiscal challenges and implement sustainable solutions. The political gridlock and lack of consensus on fiscal policy could exacerbate the situation, making it imperative for leaders to prioritize fiscal responsibility and economic stability.
