U.S. national debt skyrockets past $38 trillion, the Treasury Department reports

"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."

"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 U.S. gross national debt exceeded $38 trillion amid a federal government shutdown, marking the fastest trillion-dollar increase outside the COVID-19 pandemic after reaching $37 trillion in August. The Treasury Department report logs the nation's daily finances and records the milestone. Economists warn that a growing debt load over time can lead to higher inflation and erode Americans' purchasing power. The Government Accountability Office cites rising debt impacts such as higher borrowing costs for mortgages and cars, lower wages from reduced business investment, and pricier goods and services. Treasury analysis shows an April-to-September cumulative deficit of $468 billion, and the administration reports deficit reductions through spending cuts and higher revenue.

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