What the $38 Trillion Milestone Means
In October 2025, the U.S. gross national debt crossed the $38 trillion mark, a record-setting figure in the nation’s fiscal history.
That number represents the total amount the federal government owes, not just for one year’s deficit, but the cumulative result of years of borrowing. In plain terms: every year the government spends more than it collects in revenue, it must borrow, and that borrowing adds up over time.
At $38 trillion, the debt level is moving higher faster than ever: the jump from $37 trillion to $38 trillion happened in about 71 days.
From a consumer-advocate perspective, this has important implications. While the headline is about the federal government’s books, the ripple effects can reach personal debt, borrowing costs, employment security, and consumer rights. It is crucial to understand both how this happened and what it could mean for you.
In this article we’ll walk through:
- What this debt figure actually is
- How it works and why it matters
- How it can affect individual borrowers
- What you can do about it — protections and practical next steps
How the U.S. Gross National Debt Works
What is “gross national debt”?
The U.S. gross national debt is the total amount of money the federal government owes to creditors — other countries, private investors, the public, and even intra-government accounts (such as trust funds). It differs from the yearly deficit, which is the gap between what the government spends and what it collects in a given year.
Why is it ballooning now?
Several forces are driving the rapid increase:
- Interest costs are rising. Because of higher interest rates and the larger debt base, servicing the debt (i.e., paying interest) is becoming a heavier burden.
- Government shutdown and delayed borrowing have amplified the pace of debt accumulation. For example, the recent $1 trillion jump to $38 trillion occurred during a period of fiscal and legislative gridlock.
- Demographics and mandatory spending: An aging population means more spending on programs such as Medicare and Social Security, while tax receipts may not keep pace.
Why it matters in economic terms
When a government carries large debt, a few things can happen:
- Higher borrowing costs. As the debt grows, lenders may demand higher rates to compensate for risk, making borrowing more expensive.
- Crowding-out of investment. If large portions of the budget go to interest payments, there is less left for things like infrastructure, education, and other public investments.
- Higher risk of economic instability. Rapid debt growth can erode confidence, with potential effects on inflation, currency stability, and financial markets.
How the National Debt Can Affect Consumers
You might reasonably ask: “This is about federal finances. How does it affect me?” The truth is, it can in several indirect but meaningful ways.
1. Borrowing costs may rise
Imagine you are applying for a mortgage or taking out a car loan. If the overall cost of borrowing in the economy rises because interest rates increase to help the government service its debt, your cost goes up too. That could mean higher monthly payments, slower payoff, more risk of falling behind.
For example, a hypothetical consumer takes out a 30-year home loan: if rates rise just 1% because of higher national borrowing costs, their payment could increase by several hundreds of dollars each month.
2. Wage growth and job security could suffer
When governments allocate more of their budget to debt servicing, less may be available for public investments or programs that indirectly support job growth and wage increases. In a real-world example, a young professional might expect steady wage increases but instead finds their company tightening budgets because overall economic growth is weak. That may make it harder to manage personal debt or pay off credit cards.
3. Consumer protections and legal rights could be under pressure
When federal budgets are tight, regulatory agencies that protect consumers (such as those overseeing credit reporting, debt collection practices, and consumer financial protection) may face cuts or reduced enforcement. That means more risk for borrowers who are dealing with aggressive collectors or facing inaccurate credit reports. Your rights under laws like the Fair Credit Reporting Act become even more important.
4. Inflation and purchasing power erosion
Debt growth can contribute to inflationary pressures: if the government finances debt by issuing more currency or borrowing heavily, the value of money can weaken. That means your dollar may not go as far. For someone on a fixed income or managing debt, this can be a hidden but serious risk.
Solutions, Protections, and Next Steps for Borrowers
As the national debt expands, every consumer has a stake in protecting their personal finances. Here are concrete steps you can take.
A. Understand and monitor your rights
- Know your rights under the Fair Credit Reporting Act and other consumer-protection laws. If a creditor or collector is harassing you, misreporting your credit, or violating your rights, you have legal recourse.
- Keep track of your credit reports and scores. Dispute inaccurate items promptly.
- If you’re facing collection calls or notices, document everything. Ask for validation, review whether the debt is accurate and within the statute of limitations for your state.
B. Manage your debt proactively
- Consider refinancing high-interest loans if possible, but beware of rising rates overall.
- Prioritize paying off debts that charge variable or adjustable interest rates, since those are most exposed if rates continue to climb.
- Build and maintain an emergency fund. When the broader economy is under pressure, unexpected expenses or job changes can throw you off balance.
C. Seek legal support when you need it
When monthly payments become impossible to afford, the pressure can escalate quickly. Many borrowers begin receiving nonstop calls, collection letters, or threats of legal action. These situations are frightening, especially when you’re already juggling financial stress, family responsibilities, or job uncertainty. But you are not powerless, and you do not have to face creditor pressure alone.
At Guardian Litigation Group our team works every day with people who are behind on payments and worried about what comes next. We help by:
- Intervening when creditors or collectors will not stop calling, ensuring communication follows lawful standards instead of intimidation or harassment.
- Reviewing the debts and the collector’s claims, identifying errors, inflated balances, or attempts to collect amounts that may not be legally enforceable.
- Protecting you when a lawsuit is threatened, explaining your options, responding to legal notices, and helping you understand whether the creditor has the right to pursue the claim.
- Providing strategies for people who simply cannot afford the payments anymore, including reviewing the legitimacy of the debt, exploring possible resolutions, and helping you understand your rights before anything reaches a courtroom.
Our goal is to give you breathing room, regain control over your financial situation, and stop unlawful creditor behavior before it harms your credit or your peace of mind.
D. Stay informed and speak up
Large-scale fiscal issues like rising national debt may feel remote, but they shape the context in which you borrow, save, and live. Pay attention to:
- Interest-rate trends (which affect loans and credit cards)
- Government policies on consumer protection
- Legislative changes that could impact your rights or borrowing environment
By staying informed you are better positioned to react early, protect yourself, and seek help when needed.
Final Takeaway
The U.S. gross national debt eclipsing $38 trillion is more than a headline figure. It signals a shifting economic terrain that can create ripple effects for everyday borrowers; from higher borrowing costs, to weaker consumer protections, to inflation-induced stress. But you do not have to be a passive victim of these forces. You can take control of your financial rights, manage your debt proactively, and seek legal support when needed.
When the landscape gets tougher, strong representation matters. If you’re feeling pressure from creditors, worried about your credit record, or uncertain about how to protect yourself, reach out to Guardian Litigation Group for guidance, advocacy, and protection.
Let us help you defend your rights and find a path forward.
Contact Guardian Litigation Group today for a consultation and let us stand with you.
Additional PAA Information
- Why did the U.S. gross national debt reach $38 trillion so quickly in 2025?
A combination of factors caused the rapid rise: delayed borrowing while debt ceiling negotiations dragged on, a federal government shutdown that increased costs, higher interest rates that increased borrowing costs, and escalating mandatory spending tied to demographics and program costs. - How does the national debt affect interest rates for consumers?
When a government has to borrow large amounts, greater demand for credit can push interest rates higher. Lenders may charge higher rates for loans and credit products to offset risk or inflation expectations. Consumers with variable-rate debt or new borrowing may feel the effect of higher costs. - Will the national debt make my credit score worse? Not directly. Your personal credit score is based on your credit history, payment behavior, and debt levels. But if higher borrowing costs or economic stress from broader fiscal conditions make you miss payments or carry higher balances, that can certainly damage your credit score.
- Could the $38 trillion national debt lead to inflation?
Yes, it could. Large government borrowing and heavy debt servicing can contribute to inflationary pressures if supported by monetary expansion or if they erode confidence in the currency. Inflation reduces purchasing power and can make debts harder to pay off. - Should borrowers adjust their borrowing strategy because of the national debt?
Yes. Borrowers should be more cautious: avoid variable-rate loans when possible, refinance while rates are favorable, build savings for emergencies, and prioritize repayment of high-interest debt. Understanding the macro environment helps inform smarter personal finance decisions. - Is the national debt the same as the budget deficit?
No. The budget deficit is the yearly shortfall when government spending exceeds revenue. The national debt is the cumulative total of all past deficits minus any surpluses. They are related but distinct.
The information provided in this blog article is for informational and entertainment purposes only and should not be construed as legal advice. It is not intended to create, and does not constitute, an attorney-client relationship. Every legal situation is unique, and readers should consult a licensed attorney for advice specific to their circumstances.