The Arithmetic of Empires: When $38 Trillion Becomes Just A Number
We crossed a threshold on October 22nd that historians will probably use as a reference point, though nobody in the market will remember it that way. The U.S. gross national debt surpassed $38 trillion, reaching $38,019,813,354,700.26—the fastest accumulation of a trillion dollars in debt outside of the COVID-19 pandemic, arriving just two months after hitting $37 trillion in August.
The number itself is almost meaningless. It amounts to roughly $111,000 of debt for every American, which is simply math that no household could survive. That's not an indictment of the number's size so much as an observation about the fundamental difference between individual and sovereign accounting. A nation operates in geological time compared to a human life. Empires think in centuries when they're thinking at all. The Joint Economic Committee estimates that the total national debt has grown by $69,713.82 per second for the past year. That's $2.2 trillion annualized. The velocity is what matters.
To make the pattern visible, consider the acceleration: The debt rose from $34 trillion in January 2024 to $35 trillion in July 2024, then $36 trillion in November 2024, to $37 trillion in August 2025, and now $38 trillion in October 2025. Each trillion dollars now arrives faster than the last. We're watching the rate of increase itself increase. This is exponential spending in a time of political deadlock—a mathematical inevitability meeting a governance failure.
Where This Leads
The historians looking back at 2025 will likely focus on three numbers that form the real story.
First, Moody's downgraded the U.S. credit rating in May from Aaa to Aa1, and Standard & Poor's and Fitch Ratings have also lowered the U.S. rating. This is worth pausing on. The United States held a AAA rating continuously from 1917 onward—108 years of it. The U.S. doesn't have a top credit rating at any of the three major ratings agencies, with two downgrades occurring in 2025. When three major rating agencies coordinate a message, they're reading from the same spreadsheet: the trajectory is unsustainable.
Second, the interest rate burden. Interest payments on the nation's debt are forecast to rise from $4 trillion over the past decade to $14 trillion over the next 10 years. Let that settle in. We're tripling the interest burden within a decade. In 2021, the average rate on U.S. government debt was 1.61%, and now it's 3.36%. Every percentage point rise compounds immediately across the entire debt stock. This is crowding out. It's structural. It's visible in the budget right now if you look.
Third, the context collapse. The government remains closed during a shutdown with hundreds of thousands of federal workers going unpaid. The Office of Management and Budget estimated that a 2013 U.S. government shutdown cost $2 billion in lost worker productivity. A shutdown increases the debt because economic activity stops and programs restart at higher cost. We're essentially paying to paralyze ourselves. This is Washington's version of economic self-harm dressed up as negotiating tactic.
The Comparison They Won't Make
Here's what makes this moment historically distinct: most empires didn't face this problem consciously. Rome didn't publish its fiscal accounts quarterly. Spain didn't have credit rating agencies issuing downgrades. The British Empire didn't have to navigate democracy and markets simultaneously while managing imperial decline.
The U.S. has all three. The debt is public. The decline is measurable. The alternatives are transparent. And yet the response is to... continue. Treasury Secretary Scott Bessent said that from April to September, the nation's total deficit totaled $468 billion, which is the lowest reading since 2019. This is being celebrated. Six months of a $468 billion deficit is being framed as fiscal discipline. The baseline has moved so far that we're impressed by bad news that's merely less catastrophic than the trend.
Consider the counterfactual briefly: What if the markets actually priced this in? What if 10-year Treasuries reflected the real trajectory instead of sitting near 4%? We'd see a repricing of $30+ trillion in assets. But that repricing would mean acknowledging what everyone knows and nobody wants to say—the next generation of Americans will inherit a government with fewer real choices. Schools, infrastructure, defense, healthcare, research: the crowding-out effect means less public investment in everything that builds productivity. Growth becomes harder. The arithmetic deteriorates. The problem becomes worse.
What Markets Are Actually Saying
The fascinating tell is what hasn't happened. Equities touched all-time highs despite this. Market expectations remain convinced that the Fed will deliver two cuts in 2025 and at least two more next year. Credit spreads haven't widened. The dollar hasn't collapsed. Gold is elevated but not in panic mode.
This suggests markets have priced in a consensus view: either the debt will be inflated away gradually, geopolitical fragmentation makes the U.S. credit essential regardless, or reform will happen when forced. Possibly all three. The market isn't in denial about the trajectory—it's just pricing in that Washington will muddle through the same way it always does. Dysfunction as a feature, not a bug.
The shutdown persists. The debt accelerates. The Fed cuts rates anyway because the political pressure is real and the unemployment signal was real. Each action makes the next action harder. The playbook is well-worn: stimulus when you're not supposed to, inflation as the tax on savers, and eventually a rebalancing that politicians pretend they didn't see coming.
History doesn't end this way often. Usually there's a crisis, a shock, a moment where the arithmetic becomes undeniable.
Sometimes the arithmetic just keeps running in the background while everyone watches something else.
The question isn't whether we hit $39 trillion. Economists warn the debt could reach $39 trillion within months as borrowing accelerates. We will. The question is what asset prices will do when the question stops being academic and becomes immediate. Until then, we're just counting.