The U.S. gross national debt surpassed $38 trillion for the first time, according to U.S. Treasury Department data.
The country’s growing debt comes as government remains closeddisrupting the economy while hundreds of thousands of federal workers go unpaid.
State shutdowns can increase the national debt because they delay economic activity and budget decisions, while pausing federal programs and restarting them can also increase costs. The Office of Management and Budget estimated that a 2013 U.S. government shutdown cost $2 billion in lost worker productivity.
“Reaching $38 trillion in debt during a government shutdown is the latest troubling sign that lawmakers are failing to meet their basic budgetary obligations,” Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a nonpartisan, nonprofit organization focused on fiscal policy, said in a statement.
“If it seems like we’re adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re at is twice as fast as the growth rate since 2000,” he added.
The longest shutdown in U.S. history, the 35-day standoff in 2018, cost the economy $11 billion, largely due to reduced spending by federal workers, according to the Congressional Budget Office.
In September, 81% of voters surveyed by the Peterson Foundation highlighted the national debt as a concern. Economists say the growing mountain of debt is leading to higher interest costs for the U.S. government.
Interest payments on the national debt are expected to increase from $4 trillion over the past decade to $14 trillion over the next 10 years, reducing public and private spending in key economic sectors, the Peterson Foundation said.
Rising U.S. debt could also undermine investor confidence in the economy, David Kelly, chief global strategist at JP Morgan Asset Management, said in a report earlier this month.
Moody’s rating agency lowered the credit rating of the United States in May from its highest rating, Aaa, to Aa1, reflecting investors’ concerns about the government’s growing debt. The two other major rating agencies, Standard & Poor’s and Fitch Ratings, also downgraded the US rating.
Maya MacGuineas, chair of the Committee for a Responsible Federal Budget and a leading voice on fiscal policy in the country, also expressed concern about the national debt which exceeds $38 trillion.
“The reality is that we are becoming woefully insensitive to our own dysfunction. We fail to pass budgets, we miss deadlines, we ignore budget guarantees, and we haggle over fractions of a budget while leaving key drivers intact,” she said in a statement. “Social Security and Medicare, for example, are just seven years after exhausting their trust funds – and our political leaders are saying nothing about how to avoid such a disaster.”
