US National Debt Surges Past $38 Trillion, Raising Inflation Concerns
The US government's gross national debt has breached $38 trillion, marking one of the fastest accumulations outside pandemic years. Treasury data shows a $1 trillion increase since August, pushing the debt-to-GDP ratio to 125%—a level that threatens economic stability and household purchasing power.
Federal policymakers now face mounting pressure to address repayment obligations before fiscal year-end. Kent Smetters, former Treasury official and Penn Wharton Budget Model director, warns this trajectory fuels inflation: "People want assurance their children can afford homes. Compound inflation erodes that possibility."
The debt now nears the combined GDP of China, India, Japan, Germany, and the UK—a staggering comparison underscoring systemic risks. With 2025 GDP projected at $30.12 trillion against $37.64 trillion in debt, fiscal constraints may Ripple through markets traditionally seen as hedges against currency devaluation.
