ASIa‑Pacific News: America’s worsening debt picture keeps deteriorating day by day.

Recent figures show interest payments on roughly $40 trillion of US national debt keep climbing. Higher Treasury yields have further lifted the government’s financing costs.

According to new analysis from bond‑focused investment firm DoubleLine, annual federal interest outlays now account for 18.5% of federal government revenue, officially exceeding the prior historical high of 18.4% set back in 1991.

(Image Source: Yahoo Finance)

Strategists at the Kobeissi Letter wrote in a report: “America’s debt crisis is moving into uncharted territory.”

Notably, this ratio has more than quadrupled over the past four years.

Annual debt‑related interest costs for the US government have hit a record‑high $1.25 trillion, more than four times the 1991 level.

Undoubtedly, this sharp surge in interest spending fundamentally threatens America’s long‑term fiscal stability.

This means nearly one dollar out of every five dollars of government revenue must go toward servicing interest on accumulated past debt.

These funds could otherwise be channelled into more productive economic endeavours, such as:

national defence build‑up;

infrastructure investment;

social safety‑net programmes including social security.

As debt‑service costs outpace several large‑scale federal programmes, mandatory spending risks crowding out the government’s discretionary fiscal room.

Meanwhile, the United States risks falling into a vicious cycle:

The government must issue more debt just to cover rising interest expenses.

Such structural pressure also weakens Washington’s capacity to deploy fiscal stimulus amid future economic recessions.

PeRSIstent upward moves in 10‑year and 30‑year Treasury yields compound the problem further.

Ben Emons, founder of Fed Watch Advisors, commented: “This is not only a milestone because of the sheer size of debt; what is more worrying is that debt growth has outpaced economic expansion.”

He stated: “Since 1970, US nominal GDP has expanded by roughly $470 billion per year on average, while federal debt has grown faster, adding around $760 billion annually over the same period.”

Still, Emons added: “The $40‑trillion‑debt milestone may still feel manageable for markets.”

The weighted‑average interest rate on new US government borrowing currently stands at roughly 3.5%, well below the 7% threshold that several debt‑sustainability models flag as a trigger for severe stress.

Even so, worries over America’s long‑run fiscal resilience keep mounting as interest rates stay elevated and debt‑servicing costs keep marching higher.