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US Hits $38 Trillion in Debt 10/23 06:28
In the midst of a federal government shutdown, the U.S. government's gross
national debt surpassed $38 trillion Wednesday, a record number that highlights
the accelerating accumulation of debt on America's balance sheet.
WASHINGTON (AP) -- In the midst of a federal government shutdown, the U.S.
government's gross national debt surpassed $38 trillion Wednesday, a record
number that highlights the accelerating accumulation of debt on America's
balance sheet.
It's also the fastest accumulation of a trillion dollars in debt outside of
the COVID-19 pandemic -- the U.S. hit $37 trillion in gross national debt in
August this year.
The $38 trillion update is found in the latest Treasury Department report,
which logs the nation's daily finances.
Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model,
who served in President George W. Bush's Treasury Department, told The
Associated Press that a growing debt load over time leads ultimately to higher
inflation, eroding Americans' purchasing power.
The Government Accountability Office outlines some of the impacts of rising
government debt on Americans -- including higher borrowing costs for things
like mortgages and cars, lower wages from businesses having less money
available to invest, and more expensive goods and services.
"I think a lot of people want to know that their kids and grandkids are
going to be in good, decent shape in the future -- that they will be able to
afford a house," Smetters said. "That additional inflation compounds" and
erodes consumers' purchasing power, he said, making it less possible for future
generations to achieve home ownership goals.
The Trump administration says its policies are helping to slow government
spending and will shrink the nation's massive deficit. A new analysis by
Treasury Department officials states that from April to September, the
cumulative deficit totaled $468 billion. In a post on X Wednesday, Treasury
Secretary Scott Bessent said that's the lowest reading since 2019.
"During his first eight months in office, President Trump has reduced the
deficit by $350 billion compared to the same period in 2024 by cutting spending
and boosting revenue," White House spokesman Kush Desai said in a statement,
adding that the administration would pursue robust economic growth, lower
inflation, tariff revenue, lower borrowing costs and cuts to waste, fraud and
abuse.
The Joint Economic Committee estimates that the total national debt has
grown by $69,713.82 per second for the past year.
Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, said in
a statement that "reaching $38 trillion in debt during a government shutdown is
the latest troubling sign that lawmakers are not meeting their basic fiscal
duties."
"Along with increasing debt, you get higher interest costs, which are now
the fastest growing part of the budget," Peterson added. "We spent $4 trillion
on interest over the last decade, but will spend $14 trillion in the next ten
years. Interest costs crowd out important public and private investments in our
future, harming the economy for every American."
The U.S. hit $34 trillion in debt in January 2024, $35 trillion in July 2024
and $36 trillion in November 2024.
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