WASHINGTON, D.C.: The U.S. national debt has surged past US$38 trillion, hitting a new record during a government shutdown and underscoring the speed at which America is piling on debt even in times of relative economic calm.

It marks the fastest $1 trillion increase in borrowing outside the pandemic years; the debt stood at $37 trillion as recently as August, according to Treasury Department data released Wednesday.

The milestone highlights the scale and urgency of America's fiscal challenges as policymakers remain locked in partisan gridlock. The Treasury's latest report shows the nation's gross national debt at $38 trillion, with borrowing accelerating despite efforts by the Trump administration to rein in spending.

Economists warn that the growing debt load will have long-term consequences for ordinary Americans.

Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model, who previously served in President George W. Bush's Treasury Department, said sustained borrowing fuels inflation and chips away at household purchasing power.

"A growing debt load over time leads ultimately to higher inflation," he said. "That additional inflation compounds and erodes consumers' purchasing power, making it less possible for future generations to achieve home ownership goals."

The Government Accountability Office has detailed how rising federal debt affects households — from higher borrowing costs on mortgages and car loans to lower wages as businesses invest less, and costlier goods and services as inflation persists.

The Trump administration said its policies are helping to slow spending growth and reduce the federal deficit.

Treasury Secretary Scott Bessent said in a post on X that the U.S. deficit from April to September totaled $468 billion, the lowest level 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," said White House spokesman Kush Desai. He added that the administration will continue pursuing "robust economic growth, lower inflation, tariff revenue, lower borrowing costs and cuts to waste, fraud and abuse."

Still, the numbers point to a steep trajectory. The national debt has risen by $4 trillion in under two years, from $34 trillion in January 2024 to $38 trillion this month.

The Joint Economic Committee estimates that the national debt has increased by $69,713.82 every second over the past year.

Fiscal experts say ballooning interest payments are now one of the biggest threats to the U.S. budget.

Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, said 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 said. "We spent $4 trillion on interest over the last decade, but will spend $14 trillion in the next ten years."

Peterson warned that these mounting interest obligations "crowd out important public and private investments in our future, harming the economy for every American."

The debt's swift climb, $34 trillion in January 2024, $35 trillion by July, and $36 trillion by November, has revived debates in Washington about long-term fiscal sustainability.