Federal Reserve press releases and financial news

US Interest Payments Surpass Defense Spending for First Time, Totaling $514 Billion

May 22, 2024, 12:30 AM

The United States has reached a significant fiscal milestone as interest payments on the national debt have surpassed defense spending for the first time in history. In the first seven months of fiscal year 2024, interest payments totaled $514 billion, outpacing defense spending by $20 billion. The U.S. national debt has surged to $34.7 trillion, with a debt-to-GDP ratio now at 124.70%. This development has raised concerns among policymakers about the sustainability of the country's fiscal path. Additionally, Goldman Sachs projects that the U.S. debt-to-GDP ratio will reach 130% by 2034, compared to a previous forecast of 97%. The rising interest costs are attributed to the increasing national debt and higher interest rates, which have reached a record 21.6% for credit card debt. The U.S. maintains the largest defense budget in the world.