What Is the National Debt Costing Us? (2024)

FAQs

How much does the US National Debt Service cost? ›

The cost of paying for America's national debt crossed the $1 trillion dollar mark in 2023, driven by high interest rates and a record $34 trillion mountain of debt. Over the last decade, U.S. debt interest payments have more than doubled amid vast government spending during the pandemic crisis.

U.S. monthly interest rate on interest-bearing debt 2019-2024. As of March 2024, the United States government has a monthly interest rate of 3.22 percent on its debt, continuing an upward trend in interest rates that began at the beginning of 2022. In March 2024, U.S. debt reached 34.47 trillion U.S. dollars.

Maintaining the National Debt

As of April 2024 it costs $624 billion to maintain the debt, which is 16% of the total federal spending in fiscal year 2024.

The United States' debt-to-GDP ratio at the close of fiscal year 2023 was 97 percent. While this figure is down slightly from 100 percent in 2020, a 74-year high, the nation's fiscal outlook is still on an unsustainable path. Debt held by the public is on track to exceed GDP in 2025 and climb to 116 percent in 2034.

In 2023, the federal government spent $658 billion on net interest costs on the national debt. That total, which grew by 38 percent from $476 billion in 2022, was the largest amount ever spent on interest in the budget and totaled 2.4 percent of gross domestic product (GDP).

Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).

The cost of debt is the total interest expense owed on a debt. Put simply, the cost of debt is the effective interest rate or the total amount of interest that a company or individual owes on any liabilities, such as bonds and loans. This expense can refer to either the before-tax or after-tax cost of debt.

The $34 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. Learn more about different ways to measure our national debt.

At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.

Who do we owe the US debt to? ›

The public owes 74 percent of the current federal debt. Intragovernmental debt accounts for 26 percent or $5.9 trillion. The public includes foreign investors and foreign governments. These two groups account for 30 percent of the debt.

One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.

Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).

The least indebted state is Oklahoma, according to the report, followed by Iowa and a tie for third with New Hampshire and Nebraska. The fifth best state in the category is Ohio. The next five best states, from best to worst, are Wyoming, Indiana, and Wisconsin, with Vermont and South Dakota tied in their ranking.

The US Department of Treasury building seen in March 2023. US government debt is nearing $35 trillion. The high and rising level of US government debt risks driving up borrowing costs around the world and undermining global financial stability, the International Monetary Fund has warned.

The fees you'll pay to use National Debt Relief range from 15% to 25% of the enrolled debt amount, depending on where you live. These fees are added to the amount you pay into a secured savings account each month while your debts are being negotiated.

The cost of borrowing money that is due to the passage of time, the rate of interest and the amount outstanding during the reporting period (fiscal year), plus any fees associated with such financing arrangements.

What is Debt Servicing Cost? At its core, debt servicing cost is the money that a government needs to pay back its creditors over a period of time. This includes both the principal amount (the original sum borrowed) and the interest that accrues on that principal.

If all Americans pitched in, it would take $94,000 from each one of us, every man, woman and child, to pay off the national debt. The U.S. national debt, in dollars, is by far the largest in the world. But we also have the largest economy in the world. And that is how most experts approach this.