U.S. National Debt Surpasses $38 Trillion
This week, the national debt of the United States crossed the $38 trillion mark for the first time, marking yet another historic moment as the government continues to pile on debt at unprecedented rates.
As of October 21, the total debt stood at around $38 trillion, specifically at $38,019,813,354,700.26, according to fresh data released by the Ministry of Finance.
This milestone comes just over two months after the debt initially hit $37 trillion in mid-August, and it’s barely a year since it crossed the $36 trillion threshold last December.
The rapid increase in America’s debt over the last ten years can largely be attributed to an aging population and the rising number of individuals enrolled in Social Security and Medicare.
Additionally, a significant contributor to the escalating debt is the interest incurred from servicing it. This has surged not only because the debt itself has increased but also due to raised interest rates aimed at combating inflation.
Michael A. Peterson, the CEO of the Peter G. Peterson Foundation, remarked that reaching $38 trillion during ongoing government shutdowns serves as a worrying indication that lawmakers are not adequately addressing fundamental fiscal responsibilities.
Peterson further explained, “If it seems like our debt is growing faster than ever, that’s because it is. Just two months ago, we crossed the $37 trillion mark, making this growth twice as fast as it was since 2000.”
He also highlighted the exploding costs of servicing the national debt, estimating the U.S. will spend about $4 trillion on this in the past decade and around $14 trillion in the next ten years, emphasizing that these interest costs are hampering essential public and private investments and negatively affecting the broader economy.
The federal government recorded a budget deficit of around $1.8 trillion for the recent fiscal year that concluded on September 30, with expectations of widening deficits in the coming years driven by rising entitlement spending and interest obligations.
The nonpartisan Congressional Budget Office (CBO) forecasts that debt held by the public—a common metric used by economists to measure national debt against the economy’s real gross domestic product (GDP)—will increase from roughly 100% of GDP in 2025 to 120% by 2035.
During that time, the annual budget deficit is predicted to escalate to approximately $2.6 trillion by 2035, contributing to an overall deficit of $22.7 trillion over the next decade.
A major part of this growth is attributed to the increasing interest payments on government bonds, which are expected to climb from $1 trillion this year to $1.8 trillion in 2035.
For the next ten years, the CBO anticipates total federal spending to reach $88 trillion (about 23.6% of GDP), while tax revenues are expected to surpass $65 trillion (around 17.5% of GDP).
Notably, this level of federal spending is significantly above the historical average of 21.1% of GDP over the past 50 years, while tax revenues are just slightly above the 50-year average of 17.3%.
