A family in Ohio that refinanced their mortgage this summer is paying the bank almost 6.7% annually — and this is not a whim of the lender, but a direct echo of what is happening in the U.S. Department of the Treasury. This is because fixed rates on housing track the yield of long-term government bonds, which is rising along with Washington's appetite for borrowing.
On Wednesday, the federal government's debt account crossed the 40 trillion dollar mark for the first time. This is reported by Reuters, as conveyed by UNN.
Total U.S. debt exceeded 40 trillion dollars for the first time, the U.S. Department of the Treasury announced Wednesday, prompting new warnings about an impending fiscal crisis, as spending growth on social security programs and interest payments significantly exceeds revenues constrained by tax cuts
Of the total amount, 32.266 trillion dollars are Treasury securities held by the public, and another 7.782 trillion are domestic government debt assets.
A pace that frightens budget analysts
The previous trillion in debt took five months to accumulate — and this is already a record pace in itself. Michael Peterson, head of the Peter G. Peterson Foundation, stated plainly: "we have doubled the federal debt in less than 10 years".
The federal government's debt account has more than doubled in less than a decade — from 19.95 trillion dollars when Donald Trump first took the oath in January 2017. Approximately a third of this increase occurred over two years of borrowing to combat the COVID-19 pandemic under Trump and Biden, while the remainder is explained by fiscal decisions of both presidents combined with long-standing imbalances in taxes and spending.
When debt service costs more than the military
The key and truly human dimension of this figure — not the debt itself, but what it costs to maintain it. In fiscal year 2025, the federal government paid 970 billion dollars in net interest payments — more than on national defense (917 billion), Medicaid (668 billion) or veterans benefits (377 billion).
In terms of households, this amount looks like this: 970 billion dollars in interest payments — this is approximately 7,300 dollars per household, more than a typical family spends annually on healthcare, home furnishings, gasoline, clothing or education combined.
And the trend is only accelerating. According to the Congressional Budget Office forecast, interest payments will grow by 76% over the period of fiscal years 2026-2035 — from 1.0 trillion in 2026 to 1.8 trillion dollars in 2035, and no other major budget item will grow faster.
July deficit and who really pays
The U.S. federal budget deficit in July reached a record high of 432 billion dollars due to increased spending, including on Medicare. Over 10 months of fiscal year 2026, the deficit amounted to 1.8 trillion dollars, and debt payments increased by 15%.
This is where the honest conflict of this story lies: money that goes to debt service is not an abstraction for Wall Street traders. It competes in the budget with real programs, and part of the interest actually leaves the country — according to RAND researchers' estimates, almost a quarter of interest payments on federal debt go to other countries, including China, building their economies rather than the American one.
Budget groups spent several weeks expecting that national debt would cross the 40 trillion dollar mark, and warn of the possibility of a full-scale debt crisis if lawmakers do not address the problem of unsustainable budget conditions.
What's next
Congress and the White House have talked for years about "fiscal responsibility," but neither of the two parties has yet proposed a plan that actually reduces borrowing rather than simply slowing its growth. The question is not whether the debt bubble will burst tomorrow — the dollar and the bond market are holding up so far. The question is how many more years American households will pay for mortgages and credit cards several percentage points higher, while Washington figures out who exactly should cut spending first.
