US Federal Interest Costs

Interest payments and current expenditures both come from the same Bureau of Economic Analysis quarterly accounts, at seasonally adjusted annual rates, so the ratio uses one basis. The series runs back to 1947, as far as the accounts go, which puts the post-war record on the chart. One note: current expenditures in these accounts are close to the unified-budget outlay total, but not the same thing, so this page shows the share rather than a budget line.

The record is 23.48% of federal spending, set in January 1991 after a decade of high interest rates and large deficits. For most of the post-war period the share stayed in single digits. The current climb has a different cause: every bond issued at today's yields locks in a higher interest bill for decades.

For US stocks the share is a crowding-out measure. Every dollar of interest is a dollar not spent on something else, and a rising share cuts fiscal room when markets expect support. It also makes the government more sensitive to every rise in yields. The share comes down only when rates fall, or when the rest of spending grows faster than the interest bill.

This page gives no default probability and no crisis date, because neither can be computed from this data. It gives the measurement. Why Japan, one of the creditors, might sell is on the Japan holdings page, and the 30-year yield setting the next decades of interest costs is on the debt spiral page.