US INSANITY

The following figures are consistent with the fiscal picture, but they benefit from a bit of context.

Here's what they mean:

• Borrowing: If the federal government is borrowing about $155 billion per month, that's roughly $1.9 trillion annualized. Dividing by about four weeks gives approximately $39 billion per week, so that arithmetic checks out.
• Interest costs: A reported $857 billion in net interest for the fiscal year to date (through the first nine months) works out to around $23.8 billion per week. Net interest is what the government pays on Treasury debt after accounting for interest income it receives.
• Increase from 2025: A rise of about $100 billion (roughly 13%) from the same period a year earlier is plausible given two major factors:
  1. The federal debt has grown.
  2. Much of the debt issued or refinanced over the past few years has been at higher interest rates than during the near-zero-rate era.

Why interest costs have become so large

The U.S. government spends money in several broad categories:

• Mandatory spending (primarily Social Security, Medicare, Medicaid, and other entitlement programs)
• Net interest on the debt
• Discretionary spending (Defense and non-defense agencies)
• A few smaller categories

Interest has become one of the fastest-growing parts of the budget because:

• The debt outstanding has increased substantially.
• Treasury securities issued years ago at very low rates have matured and been replaced with bonds carrying higher yields.
• Higher interest rates affect newly issued debt almost immediately, while the existing debt stock rolls over gradually.

The role of Social Security, Medicare, and Medicaid

You're also correct that these programs are placing increasing demands on the federal budget. The main drivers include:

• An aging population, with more retirees collecting benefits.
• Rising healthcare costs.
• Longer life expectancy relative to when these programs were designed.
• Slower growth in the number of workers paying payroll taxes compared with the growth in beneficiaries.

These programs account for a large share of federal spending and, under current law, are projected to continue growing as a percentage of the budget over coming decades.

Is the situation sustainable?

Economists disagree on how urgent the problem is, but there is broad agreement on several points:

• Persistent deficits cause the national debt to grow over time.
• Higher debt generally leads to higher interest costs, especially when interest rates are elevated.
• If interest payments continue growing faster than government revenues, they consume a larger share of the federal budget, leaving less room for other priorities unless taxes increase, spending is reduced elsewhere, or borrowing rises further.

Whether this becomes a fiscal crisis depends on factors such as future economic growth, interest rates, inflation, tax policy, and congressional decisions on spending and entitlement programs. The U.S. still benefits from borrowing in the world's largest and most liquid government bond market, but long-term budget projections from nonpartisan analysts consistently show that current fiscal policy would put debt on an upward trajectory unless policy changes are made.