The latest numbers out of Washington are more than concerning; they’re historic. The US Treasury logged a $345 billion budget deficit for August 2025.
That’s not only the biggest monthly shortfall this year but the second-worst August ever recorded for the federal books. And it’s causing US deficit spending to spiral out of control.
With one month left in the fiscal cycle, the US government is set to mark a third straight year of eye-watering deficits, pushing the annual total to $1.97 trillion.
US Treasury Budget Shows Deficit Spending Is Growing by the Month
Just a month ago, July’s deficit was $291 billion. While large, it pales next to the latest figure.
Only August of last year posted a higher monthly deficit, coming in at $380 billion. In August, government outlays spiked to $689 billion.
This spending boom comes as social insurance costs keep rising and interest payments on debt climb ever higher.
Despite some headline-grabbing good news on tariffs, the financial trajectory is only moving one way.
US customs duties set a record with $30 billion collected in August. But even with this near 300% annual jump in tariff revenue, the money collected barely dents the deficit.
The US still borrowed nearly half of every dollar it spent in July, according to Treasury data.
Third-Largest Annual Deficit Ever
The numbers for the first eleven months tell a stark story. The fiscal 2025 deficit is tracking at $1.97 trillion, a notch below only the pandemic-driven shortfalls of 2020 and 2021.
The country is on track for the third-largest deficit in its history and, based on spending and interest trends, could even surprise to the upside.
What’s driving the blowout? Federal revenues have risen by $38 billion, up 12% year-over-year, thanks in large part to tariffs and some tax receipts. But spending is growing faster, up $2 billion just in August.
The bulk of the spending surge comes from benefits programs and a hefty rise in interest expenses as the national debt climbs to new highs each month.
US deficit spending isn’t just a theoretical number in a government spreadsheet. As of September 2025, total US public debt stands at $37.43 trillion. That’s $2.09 trillion higher than one year ago.
Paying for that debt has become the government’s third-largest expense, trailing only Social Security and Medicare.
Net interest payments have soared to $478 billion so far this fiscal year, up 17% from last year.
Today, nearly 23 cents of every tax dollar goes to interest alone. By the end of the year, the Treasury projects that interest will eat up 18.4% of total federal revenues (a number not seen since the early nineties).
No Real Solution in Sight As US Deficit Spending Spirals
Some in government tout rising tariffs as a fix. The reality is much different. IMF analysts warn that expectations for big gains from tariffs are “highly uncertain.”
Even record collections aren’t enough to patch the deficit, as each new month brings higher bills and more borrowing to make ends meet.
The challenge worsens as the population ages and entitlement costs rise, leading many experts to argue that real fiscal reform is politically out of reach.
As government debt and US deficit spending spiral, investors are responding by seeking shelter outside traditional assets.
Gold and Bitcoin have attracted billions as buyers look for safety from currency debasement and runaway borrowing.
In September 2025, gold set a new record, climbing past $3,600 per ounce, and replacing the dollar as the widely held reserve asset for the first time since 1996.
Some analysts see $3,800 as the next plausible ceiling if trends continue.
Bitcoin, too, has seen a surge, rebounding to $115,000 after a dip, with many prominent analysts forecasting the BTC price could reach $200,000 by the end of the current cycle.
These alternative assets are fast becoming staples in portfolios for those worried about America’s mounting debts and fiscal gridlock.
The verdict is clear: US deficit spending is on an unsustainable path. With the hole deepening by the minute, calls for real solutions will only grow louder, and so will demand for hard assets, like Bitcoin.
Source: https://www.thecoinrepublic.com/2025/09/13/us-treasury-budget-shows-deficit-spending-spiraling-out-of-control/
