$1.2 Trillion Interest Payments Blow Up U.S. Federal Budget

The U.S. government will spend a record $1.2 trillion on interest payments in 2024, driven by pandemic-related deficit spending and the Federal Reserve's interest rate hikes aimed at curbing inflation, Investopedia reported.

The Congressional Budget Office (CBO) estimates that interest payments could rise to 3.9% of GDP over the next decade.

This amount surpasses military spending for the first time in U.S. history and represents 2.4% of the country's gross domestic product (GDP) in 2023.

The Congressional Budget Office (CBO) estimates that interest payments could rise to 3.9% of GDP over the next decade. Economists are increasingly concerned about the impact of these payments on the U.S. economy.

Meanwhile, Vice President Kamala Harris has proposed tax hikes on the wealthy and corporations to offset new spending, while both Democrats and Republicans have introduced new tax cuts that could push the deficit even higher.