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US Federal Interest Costs

The US government's single fastest-growing expense is the interest on money it has already spent. This is that bill measured the only honest way — interest payments divided by federal current expenditures, both from the same BEA quarterly accounts, back to 1947.

The Share of Spending Eaten by Interest, Since 1947

Interest payments as a percentage of everything the federal government spends, quarterly. Both sides of the ratio come from the same BEA national accounts, so this is one measurement basis, not two sources stitched together.

Interest as a Share of Federal Spending

Source: FRED A091RC1Q027SBEA and FGEXPND — BEA federal interest payments over federal current expenditures, quarterly • Yield: FRED DGS30 — 30-year Treasury constant maturity yield, daily • Latest quarter begins Apr 1, 2026 • Quarterly since 1947 — as far back as the BEA accounts go, and what puts the post-war record in view

CLIMBING TOWARD THE RECORD
Interest as % of federal spending
16.06 0.19 (1.20%) vs prevApr 1, 2026

Read the shape, not just the level. The 1980s climb ended when rates fell through the 1990s and the share bled back down from its Jan 1, 1991 record. The current climb is being driven the other way: every bond issued at today's yields — the 30-year at 5.22% as of Aug 6, 2026 — locks in a higher interest bill for decades, so the share keeps rising even if nothing else changes. That is the spiral mechanic made visible.

How to Read This Chart

The ratio is clean by construction: interest payments and current expenditures both come from the same BEA quarterly accounts, at annual rates, so nothing is mixed across sources or bases. The series runs back to 1947 — as far back as the accounts go — which is what puts the post-war record in view on the chart itself.

Both inputs come from the Bureau of Economic Analysis quarterly national accounts — interest payments and current expenditures at seasonally adjusted annual rates — so the series updates quarterly, and the interest side alone now runs at over a trillion dollars a year. One honesty note: current expenditures in these accounts are a near neighbour of the unified-budget outlay total rather than the same thing, which is why this page shows the share rather than a budget line.

The record is in the chart itself: 23.48% of federal spending, set in January 1991 after a decade of high interest rates and large deficits. The 1980s climb ended when rates fell through the 1990s and the share bled back down, and for most of the post-war period it sat in single digits. The current climb is being driven the other way: every bond issued at today's yields locks in a higher interest bill for decades, so the share keeps rising even if nothing else changes.

For US equities the share matters as a crowding-out measure: every dollar of interest is a dollar not spent on everything else, and a rising share tightens fiscal room exactly when markets expect stimulus. It also raises the government's own sensitivity to every uptick in yields. A falling share would mean the reverse — fiscal room reopening, and one less force pushing yields up — but with new bonds locking in today's rates for decades, the share comes down only when rates fall or the rest of spending grows faster than the interest bill.

Nothing on this page is a forecast: it does not claim a default probability, a crisis date, or a hit rate, because those numbers cannot be computed from real data. What it gives you is the measurement. Who some of the creditors are — and why Japan 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.

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Accounts and yield data sourced as noted above. For educational purposes only. Not investment advice.