According to the U.S. Treasury Department, the national debt of the United States has skyrocketed to over $38 trillion, which is quite alarming especially since it surpassed $37 trillion in August. This rapid increase of $1 trillion within barely two months is being highlighted by the Peter G. Peterson Foundation as the most rapid growth stably observed outside the pandemic period.
Michael A. Peterson, the CEO of this nonpartisan watchdog focusing on fiscal responsibility, noted that this new record is a “troubling indicator of lawmakers’ failure to uphold basic fiscal responsibilities.” He went further to explain in comments to Fortune, stating, “If it feels like debt is piling up faster than ever, that’s because it is. We went past $37 trillion just two months back, and the current speed of debt growth is double what we’ve seen since 2000.” The foundation’s findings point to a mix of excessive spending, increasing interest costs, along with economic factors as contributing to this dramatic acceleration.
Shutdown Compounds the Financial Strain
Adding to this financial worry is the ongoing partial government shutdown, which has now stretched into its third week. Historically, government shutdowns have incurred significant costs, like the $4 billion added during the 2018–2019 shutdown and an additional $2 billion during the 2013 shutdown, as per federal estimates. The halt in government operations is amplifying short-term expenses and delaying crucial economic activities, thus worsening the very debt situation they often create.
Furthermore, slow fiscal decision-making keeps adding to the long-term financial burden. As highlighted in consistent Treasury reports, the Treasury’s Bureau of Fiscal Service Financial Report for the 2024 fiscal year paints a grim picture, confirming the existence of an “unsustainable fiscal path” with current policies unlikely to provide a long-term solution. Post previous economic crises, measures like stricter spending caps and fiscal reforms were quickly embraced, but this time the pace is significantly lagging.
Consequences of Rising Debt
The implications of our interest payments on this ballooning debt are reaching every level of the economy. According to a recent Yale Budget Lab report, increasing national debt is likely driving inflation and pushing interest rates up, which could limit growth and raise borrowing costs for individuals and businesses alike. An analysis from EY suggests that the trajectory of national debt could result in ongoing job and income losses.
On one invisible side, some experts observed that President Donald Trump’s tariff policies are bringing in substantial revenue, estimated at $350 billion yearly—not a bad figure, as mentioned by Apollo Global Management Chief Economist Torsten Slok. The Congressional Budget Office (CBO) estimated earlier tariffs may help reduce a projected deficit by $4 trillion over the upcoming decade, although an appeals court’s ruling did throw some rules into question, leading to these tariffs being deemed partially illegal. Despite some revenue power, the U.S. credit rating has fallen from glory; none of the three major ratings agencies currently consider it a top-rated entity. The backdrop of our persistently shaky fiscal trends combined with enduring political stalemate has prompted these downgrades, raising pressing concerns over the future global stability of the U.S. dollar as the world’s go-to reserve currency.
Amid this backdrop, the precious metal gold has been in high demand during 2025, though it did see a major sell-off just last week. However, it’s still holding strong above the $4,000 mark per ounce, having gained more than 50% so far this year.
Peterson pointed out, “Continuously adding trillions to our national debt and treating budgeting like a crisis is no way for a reputable nation such as America to manage its finances. Lawmakers should seize this chance to embrace numerous responsible reforms, steering our nation towards a stronger future.”
The Treasury Department had no comment available regarding this situation.
[This article has been updated to reinsure accuracy in referencing the CBO’s estimate in August concerning $4 trillion in deficit reduction.]
This report made its debut on Fortune.com.
