U.S. debt just crossed $40T. The number gets the headlines; the real story is what it now costs to carry.
Net interest is the federal government’s 2nd-largest outlay, trailing only Social Security. FY26 year-to-date: Social Security $1.24T, net interest $827B, Medicare $780B. Interest has also passed defense spending outright — $270B vs. $267B in Q1 alone.
The average rate on marketable debt is 3.475%, more than double the 1.458% of five years ago and that’s before new issuance1. The 30Y auction recently priced at 5.22%, the highest since 2001. Every dollar of maturing debt rolls into a materially higher rate.
That’s the mechanical core of a debt spiral: higher debt → higher interest cost → wider deficit → more issuance → upward pressure on yields.
Not a one-party story: both sides added trillions across the last five terms, and deficits reflect Congress, recessions, wars, and entitlement growth as much as any single administration. The interest bill doesn’t check who’s in office. It just compounds.
1https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/debt/Monthly%20Debt%20Update.html
