In the fiscal year ending September 30, 2023, the US government spent $660 billion on interest payments on its debt. This is up from $475 billion the previous year.
The interest costs have nearly doubled over the past three years, from $345 billion in 2020 to $659 billion in 2023. Interest is now the fourth-largest government program, behind only Social Security, Medicare, and defense.
The federal government is charged interest for the use of lenders' money, in the same way that lenders charge an individual interest for a car loan or mortgage.
The widening fiscal imbalance and the Federal Reserve's rate hikes dramatically raised the federal cost of borrowing.
