For the first time ever, the U.S. government has spent more than $1 trillion this year on interest payments for its $35.3 trillion national debt, according to a report released Thursday by the Treasury Department.
With the Federal Reserve keeping benchmark interest rates at their highest level in 23 years, the government has spent $1.049 trillion on servicing its debt, marking a 30% increase from the same period last year. The total payments for the full year are projected to reach $1.158 trillion.
After accounting for the interest earned on government investments, net interest payments have totaled $843 billion, making it the third-largest expenditure after Social Security and Medicare.
The spike in debt service costs coincided with a surge in the U.S. budget deficit in August, pushing it closer to $2 trillion for the year. The deficit for August alone soared by $380 billion, a stark contrast to the $89 billion surplus seen in the same month last year, which was largely driven by accounting adjustments related to student loan forgiveness.
As of now, the 2024 deficit has nearly reached $1.9 trillion, reflecting a 24% increase from this time last year.
The yield on the benchmark 10-year Treasury note was last reported at around 3.7%, down more than three-quarters of a percentage point since early July.
