Foresight No. 7: America’s Interest Bill (full note, PDF)

Foresight, prospective note No. 7. Driss EFFINA, PhD. October 2026. PDF, 28 pages, 15 charts and diagrams, 9 tables.

In fiscal year 2026, which ended on 30 September, the United States federal government paid 1,052 billion dollars in net interest. That is 81 billion dollars more than a year earlier, 87 billion dollars more than it spent on national defence, and only 21 billion dollars less than it spent on Medicare. Net interest absorbed 19.5 percent of federal revenue, a share never recorded in the official series that start in 1940; the previous record, 18.4 percent, dates from 1991.

Inside the full note:

• Fiscal year 2026: interest passes defence, Medicare in sight
• The plumbing: a short debt that reprices fast
• Four yield paths
• The interest bill to 2036
• Crossover years: defence, Medicare and Social Security
• Volume or price? What drives the interest bill up
• Debt dynamics: the end of the growth cushion
• The interest burden threshold: history and the G7
• Debt management: the bill-share dilemma
• What it would take to stabilise the debt
• Political-economy scenarios
• A dashboard of leading indicators
• Implications for policy and for investors
• What to watch

Read the free preview: America's Interest Bill.