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$40 trillion U.S. national debt just got uglier as interest payments rise to $1.25 trillion a year
fortune.com • • general
Key Points:
- In 2025, U.S. federal net interest payments on the $40 trillion national debt reached 18.5% of revenue, surpassing the 1991 record of 18.4%, equating to $1.25 trillion—more than the entire 2026 defense budget.
- Rising interest payments force the government to borrow more just to cover interest, limiting funds available for infrastructure, education, and growth-driving investments.
- Interest expenses as a percentage of revenue have tripled since 2015 and are projected to reach 25% by 2036, according to the Congressional Budget Office, highlighting an unprecedented debt burden.
- Unlike 1991 when debt was 44% of GDP, today’s public debt exceeds 100% of GDP, making even historically moderate interest rates more costly for the government.
- Increased corporate borrowing by major tech companies for AI investments is crowding out capital from U.S. Treasuries, pushing Treasury yields higher and prompting Treasury Secretary Scott Bessent to double buybacks of long-term bonds to stabilize the market.
