What shutdown? U.S. government borrowed $619 billion during 43-day impasse
The U.S. government’s record-long shutdown rattled investors and stirred anxiety across financial markets.
However, behind the scenes, it was difficult to argue the government ever truly “shut down,” given the continued surge in federal borrowing.
During the 43-day impasse, Washington borrowed $619 billion to maintain essential government functions and meet existing spending obligations, according to The Kobeissi Letter.
That works out to roughly $14.4 billion per day. “There’s only one thing that never stops the U.S. government: deficit spending,” Kobeissi said.
Ironically, during the shutdown, the U.S. federal debt surpassed $38 trillion for the first time, marking the fastest $1 trillion increase outside the pandemic period, according to PBS.
The surge extended an ongoing pattern of heavy borrowing: the federal government ran monthly deficits in nine of the 12 months of fiscal 2025, the Peter G. Peterson Foundation reports.
So while President Trump made headlines last week by signing a new spending bill to reopen shuttered government operations, America never stopped running on borrowed money.
Economists warn that Americans will soon begin to feel the effects in the form of inflation, reduced business investment, and higher financing costs.
Deficit spending and inflation
Economist Heather Long recently warned that the 2020s are “becoming the era of big permanent deficits,” a trend she suggests could carry serious consequences for American households.
The Government Accountability Office (GAO) — an independent, nonpartisan watchdog agency that audits federal spending and evaluates government performance — has also raised alarms about the nation’s rising debt.
The GAO argues that mounting federal borrowing is contributing to higher interest rates on mortgages and auto loans, increased costs for consumers, and reduced capital available for businesses to invest and expand.
Kent Smetters, who leads the University of Pennsylvania’s Penn Wharton Budget Model, said persistent government deficits can intensify inflationary pressures, making it more difficult for Americans to save and plan for the future.
“I think a lot of people want to know that their kids and grandkids are going to be in good, decent shape in the future — that they will be able to afford a house,” Smetters told PBS.
However, current fiscal and economic trends point in a more challenging direction.
The 2020s are already shaping up to be an inflationary decade, driven in part by the lingering economic aftershocks of the pandemic.
The Consumer Price Index (CPI) peaked above 9% in mid-2022, and while inflation has moderated significantly since then, prices are still rising at an annual rate of about 3%.
That’s just the official rate.
Some economists argue that the CPI understates the true cost pressures households face because it averages prices across broad categories and may not fully capture spikes in essentials such as housing, insurance, utilities, and services.