U.S. National Debt Tops $38 Trillion for First Time Amid Mounting Fiscal Warnings

Key Facts

Published: October 23, 2025 Location: Washington D.C. Source: Wire Servcies

• U.S. national debt surpasses $38 trillion for the first time, just two months after hitting $37 trillion.
• Treasury data shows debt rising twice as fast as its average pace since 2000.
• Experts warn interest costs could reach $1.8 trillion annually by 2035, exceeding defense spending.
• Fiscal watchdogs say Washington is “numb to dysfunction” as deficits and entitlement costs soar.

by Worthy News Washington D.C. Bureau Staff

(Worthy News) – The U.S. national debt has surpassed $38 trillion for the first time in history, according to new Treasury Department data released Wednesday — marking another alarming milestone in the government’s rapidly escalating borrowing spree.

As of October 21, the gross national debt stood at $38,019,813,354,700.26, just over two months after crossing the $37 trillion threshold in mid-August and less than a year since it reached $36 trillion last December.

Economists say the pace of increase is unprecedented. “If it seems like we are adding debt faster than ever, that’s because we are,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation. “We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000.”

Peterson warned that servicing the debt is becoming one of the largest costs to taxpayers. The U.S. spent about $4 trillion on interest over the past decade, a figure projected to soar to $14 trillion over the next 10 years. “Interest costs crowd out important public and private investments in our future, harming the economy for every American,” he said.

‘Becoming Numb to Dysfunction’

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the milestone should serve as a “wake-up call.”

“It’s tough to decide what the most appalling part is of today’s announcement from the Treasury,” she said. “That we surpassed an unprecedented $38 trillion in gross national debt; that we’ll likely hit the next milestone in just a matter of months; or that we are getting this news amid a government shutdown with seemingly no end in sight.”

MacGuineas emphasized that even though “nominal gross federal debt” isn’t the sole indicator of fiscal health, “the rest of our fiscal situation is just as bleak.” Publicly held debt — the measure preferred by economists — is already roughly equal to the size of the entire U.S. economy.

“The reality is that we’re becoming distressingly numb to our own dysfunction,” she added. “We fail to pass budgets, we blow past deadlines, and we ignore fiscal safeguards. Social Security and Medicare are just seven years from having their trust funds depleted — and you don’t hear anything from our political leaders on how to avoid such a disaster.”

Deficits, Entitlements, and the Decade Ahead

The federal government ran a $1.8 trillion deficit in the fiscal year that ended September 30. The Congressional Budget Office (CBO) projects that annual shortfalls will rise to $2.6 trillion by 2035, adding an estimated $22.7 trillion to the national debt over the next decade.

Debt held by the public is forecast to climb from roughly 100% of GDP in 2025 to 120% by 2035 — a level not seen outside wartime.

The CBO also expects net interest payments on the debt to grow from about $1 trillion this year to $1.8 trillion by 2035, outpacing even the nation’s defense spending.

Overall, federal spending is projected to total $88 trillion over the next decade — equal to 23.6% of GDP, well above the 50-year average of 21.1%. Tax revenue, by contrast, is expected to remain near 17.5% of GDP, only slightly above historical norms.

The Committee for a Responsible Federal Budget attributed the sharp rise from $37 to $38 trillion partly to “delayed borrowing” while the U.S. approached its debt ceiling earlier this year, forcing the Treasury to rely on “extraordinary measures” to avoid default.

With another debt-ceiling debate looming and no bipartisan agreement on long-term spending reform, experts warn that the United States is on a perilous path.

“Policymakers have a choice,” MacGuineas said. “They can continue to abdicate the most basic responsibilities of budgeting — or finally confront the worsening fiscal situation before it’s too late.”

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