The Trumpian Misfortunes of America

U.S. Treasury has borrowed $155 billion every month of this fiscal year—and is now paying $24 billion a week in interest on its debts

Despite concerns from debt hawks, the U.S. government is continuing to borrow at pace: For the fiscal year of 2026 so far, the federal deficit has totaled just under $1.4 trillion.

The first nine months of this fiscal year (beginning in October) have now surpassed the borrowing levels of 2025, when deficits totaled just over $1.3 trillion for the same period.

At the time of writing, the total U.S. national debt sits at $39.4 trillion, accumulated under administrations led by both Republicans and Democrats.

What factors are increasing Social Security and Medicare costs?

What is driving the U.S. federal deficit increase?

What solutions are experts proposing for deficit reduction?

How much does the U.S. pay in debt interest?


As such, the monthly borrowing for 2026 now sits at roughly $155 billion, or $39 billion per week. And, like any borrower, that debt carries an interest cost. The latest monthly budget review from the Congressional Budget Office (CBO) confirms that net interest on public debt for the fiscal year has hit $857 billion: roughly $23.8 billion a week.

This is approximately $100 billion more (13%) than the interest paid out in the first nine months of 2025, the CBO adds, owing to a higher total debt burden than last year and higher long-term interest rates.

In fact, interest payments on the debt are now $20 billion larger than the outlays for the Departments of Defense, Commerce, Homeland Security, Education, the Environmental Protection Agency, the Small Business Administration, and the U.S. Coronavirus Refundable Credits scheme—combined.

Also contributing to the demand on government purse springs is the increasing demand for social security, Medicare and Medicaid.

Spending for Social Security benefits rose by $62 billion (or 5%) because of increases in average benefits and in the number of beneficiaries, CBO noted. In comparison, Medicare outlays increased by $58 billion (8%) due to higher enrollment and higher payment rates for services. Rising costs per enrollee meant Medicaid spending increased by $49 billion (10%).

This is a trend that isn't going anywhere: The U.S. population is aging. According to the Census Bureau, Americans' median age—the age at which half of the population is younger, and half is older — continues to rise, climbing from 39.2 in 2024 to 39.4 in 2025.

Men's share of the older population is particularly of note, the bureau adds. In 2001, there were 70.6 males for every 100 females age 65 and older, but by 2025, the ratio had increased substantially to 81.6.

Debt trajectory

With the factors influencing Treasury spending only embedding further over the coming decades, those concerned about the U.S. fiscal trajectory are calling for action.

So far, they haven't got much response—though there is a growing sense of urgency among policymakers, according to experts.
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America’s Debt Just Hit a WWII-Era Record While the Economy Booms: The Trap Nobody’s Talking About
Omor Ibne Ehsan
Fri, July 10, 2026 at 10:50 PM GMT+3 4 min read

DeQuadros warns U.S. debt-to-GDP has hit WWII-era levels while GDP grows 2.1%, exhausting the fiscal shock absorber before any recession arrives.

The 10Y-2Y yield spread has collapsed from 0.74% to 0.36%, signaling bond investors are already pricing in slower growth despite strong payroll numbers.

With 10-year yields at 4.48% in the 91st percentile and core PCE elevated, every debt rollover compounds interest costs while the Fed has little room to cut.

Conrad DeQuadros, Head of Economics at Citi Wealth, appeared on Bloomberg Businessweek Daily this week to highlight something that gets lost in the daily grind of earnings and Fed-watching. The United States is running a fiscal deficit that would be alarming in a recession, but the economy is not in one. It is, by most measures, growing. That combination has not really existed since World War Two.

The number that anchors his argument is the debt itself. As of July 6, 2026, U.S. public debt stood at roughly $39.39 trillion. It grows by about $100,584 per second and has added $3.17 trillion over the past year alone. Real GDP grew 2.1% in the first quarter of 2026, following a 4.4% reading in the third quarter of 2025. So the debt is climbing, and so is the economy. That is the paradox.

The WWII-Era Debt Anomaly

DeQuadros framed it directly. "We have debt as a share of GDP... you'd have to go back to World War Two to see levels similar to what we're seeing now. We have very large deficits in an economy that is in good shape." The Treasury's own daily numbers back up the pressure. Fiscal year-to-date withdrawals of $30.13 trillion already exceed deposits of $30.02 trillion, and the Treasury General Account has drawn down from $919 billion on July 1 to $783 billion by July 6. Even routine cash management is tight.

Servicing that stack is the expensive part. The 10-year Treasury yield sits at 4.56%, in the 91.6th percentile of its 12-month range. Every rollover of maturing debt at these levels ratchets up interest expense, and a core PCE reading at the 90.9th percentile gives the Fed little cover to cut aggressively. You can see the full Treasury data on the Daily Treasury Statement.

The Empty Toolbox Risk

Deficit spending is the government's shock absorber. You run deficits during a downturn to soften the landing, then repair the balance sheet when growth returns. DeQuadros's worry is that step two never happened. "If we have deficits this large, when the economy is growing quite solidly... what happens when we inevitably have that downturn and spending has to go up... how do you grow yourself out of it?" 

The bond market seems to be sniffing at this. The 10Y-2Y spread has compressed from a 12-month high of 0.74% in February 2026 to 0.36% on July 7, sitting in the lower 5% of its 12-month range. No inversion yet, but the flattening suggests investors are pricing in slower growth ahead, even as GDP readings remain positive. Goldman Sachs made a similar observation in its 2026 Investment Outlook, noting the U.S. debt-to-GDP ratio approaching a post-war high against a backdrop of $100+ trillion in total global government debt.

The Near-Term Cushion And What Investors Should Watch

The setup is not immediately dire. DeQuadros pointed to employment growth averaging 100,000 per month over the last three months, a real acceleration from 2025 when payrolls barely budged. BLS data confirms it. Nonfarm payrolls stood at 158.98 million in June 2026, up from a range-bound 158.27 million to 158.55 million across all of 2025. Wage growth is supporting consumer spending, and AI-driven productivity gains could extend the expansion, though labor force growth remains very slow.

The practical question is how to sit with a fiscal cushion that has already been spent. Long-duration Treasuries look riskier than usual if the next downturn forces even larger issuance at even higher yields. Equity investors leaning on the assumption that Washington will always deliver a rescue package should read the debt clock more carefully.

DeQuadros summed up the vulnerability. "The concern... is that given that deficits are already so large... will there be that fiscal room to provide that stabilizing force the next time we have a downturn." The economy is fine today. The toolbox is what to watch.

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Deficit Nears $1.4 Trillion in Fiscal Year 2026

Michael Rainey
Fri, July 10, 2026

The federal budget deficit totaled $1.37 trillion in the first nine months of the current fiscal year, according to the latest monthly budget review from the Congressional Budget Office.

The deficit estimate for 2026 surpasses the deficit of $1.34 trillion recorded over the same time period in 2025. The deficit is now about $35 billion higher.

Receipts in the first nine months grew by $142 billion year-over-year, rising to $4.15 trillion, CBO estimates. Higher income and payroll tax revenues drove the increase, along with raised tariff rates, which helped boost customs duty collection by $55 billion, or 51%. The rise in total receipts was partially offset by a decline in corporate income taxes, which fell by $86 billion, or 24%.

Outlays grew more than receipts, rising $178 billion to $5.52 trillion. Spending on Social Security, Medicare and Medicaid rose by $169 billion, or 7%, compared to the year before. The cost of interest on the national debt rose by $98 billion, or 13%, driven by both a larger debt and higher interest rates. Outlays for defense rose $30 billion, or 5%.

There were some reductions in spending in specific areas. Outlays by the Department of Education decreased by $55 billion, or 55%, driven by a reduction in the estimated costs of outstanding student loans. Other departments seeing spending declines include the Environmental Protection Agency (down $20 billion, or 61%), the Department of Homeland Security (down $13 billion, or 15%) and the Department of Commerce (down $10 billion, or 51%).

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that the deficit in 2026 will likely continue to run ahead of the 2025 numbers.

"After the deficit coming down between FY 2024 and 2025 due to the administration's tariff revenue and some one-time changes in spending, the new tax cuts and spending increases are now pushing the deficit above last year's level," MacGuineas said in a statement.