The interest on our colossal national debt is the nation’s second-largest expense. And the situation is only getting worse.
The nation’s Medicare and defense programs are expensive. But the cost of the national debt surpasses each of them.
During the first seven months of fiscal year 2024, the U.S. spent $514 billion on net interest, according to the nonpartisan, nonprofit Committee for a Responsible Budget.
The nation spent $465 billion on Medicare and $498 billion on national defense during the same period. Only the Social Security program costs the U.S. more.
In total, the government has spent $3.9 trillion so far this fiscal year, which started in October 2023. The amount spent on interest eclipsed the money spent on veterans, education and transportation combined.
Interest on the debt is now the fastest-growing expense in the national budget. From fiscal year 2020 to fiscal year 2023, interest nearly doubled, from $345 billion to $659 billion.
In 2020, interest accounted for 1.6% of the nation’s gross domestic product (GDP). Now, it stands at 2.4% of GDP.
Unfortunately, the situation doesn’t show any signs of improving. By the end of the current fiscal year, net interest could reach $870 billion, or 3.1% of GDP.
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