Interest costs on the national debt just surpassed spending on defense, Medicare

interest payments Rising national debt It just exceeds spending on defense and Medicare, worrying policy experts who warn that this could undermine the stability of the U.S. economy.

In the first seven months of fiscal year 2024, which began in October, spending on net interest soared to $514 billion, surpassing spending on defense ($498 billion) and Medicare ($465 billion). In fact, interest rates exceed spending on veterans for education and transportation combined.

“Rising debt will continue to put upward pressure on interest rates,” the nonpartisan Committee for a Responsible Federal Budget (CRFB), which advocates for reducing the national deficit, said in a statement. “Without reforms to reduce debt and interest, interest costs will continue to rise, crowding out spending on other priorities and burdening future generations.”

National Debt Tracker: American taxpayers (you) are currently being chased for $34,534,845,450,747.16.

Historically low interest rates have allowed the United States to borrow cheaply for years. But as the federal funds rate rose, the short-term interest rate on Treasury bills also rose, making federal borrowing much more costly.

of federal reserve In a bid to stem high inflation and cool the economy, the government raised interest rates 11 times in 2022 and 2023, taking them to their highest level in 23 years. Policymakers have indicated they intend to keep interest rates at these high levels until inflation is firmly overcome.

Interest spending is currently the second-largest item in the budget and is expected to remain so until 2024. By 2051, interest is projected to be the most expensive part of the budget.

Chief Financial Officer Philip Swagel testified on Capitol Hill in February that “increasing interest costs will crowd out other uses of government resources and pose a risk to economic stability.” Stated.

Rapidly rising deficit pushes public debt to record high in four years

Interest rates aren’t the only factor that makes debt service more expensive. Over the past decade the size of the country’s debt has increased more than four times. Debt has soared from $907 billion to more than $34.5 trillion as of Wednesday afternoon compared to just 40 years ago, according to the latest Treasury Department figures.

A spike in debt comes after a spike in spending due to. president biden And Democrats.

The size of the national debt has more than quadrupled in the past decade. (Yuri Gripas/Abaka/Bloomberg via Getty Images/Getty Images)

According to the CRFB, Mr. Biden has already approved approximately $4.8 trillion in borrowing as of September 2022, including one part of the coronavirus relief package called the American Rescue Plan. $850 trillion, with $370 billion included in the bipartisan infrastructure bill.

How much debt is too much debt?

This is about half of the $7.5 trillion, former president trump The budget deficit has increased even more during his time in office, but the amount is still far greater than the $2.5 trillion that President Trump approved at the same point in his term.

Former President Trump speaks to reporters before his speech at the annual Conservative Political Action Conference on March 4, 2023. (Anna Moneymaker/Getty Images/Getty Images)

Biden has repeatedly defended his administration’s spending and boasted of cutting the budget deficit by $1.7 trillion.

“Parenthetically, I reduced the debt by $1.7 trillion in my first two years. No president has ever done that,” Biden said recently.

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However, this figure refers to the reduction in the national deficit from FY2020 to FY2022. The deficit declined during that period, mainly due to emergency measures taken during the economic crisis. COVID-19 pandemic Expired.