Trump Opens Bitcoin Door as US Debt Blows Past $40 Trillion

The tab has more than doubled from roughly $19.95 trillion when U.S. President Donald Trump first entered office in January 2017. More telling, Washington piled on the latest $1 trillion in barely five months after federal debt cracked $39 trillion in March.

There is plenty of blame to spread around. Pandemic spending under Trump and former President Joe Biden turbocharged borrowing, while Social Security, Medicare, tax policy, massive defense spending, and chronic federal deficits kept the machine running. Higher interest rates have now made that bill considerably harder to hide.

Interest Costs Turn Debt Into a Feedback Loop

Net federal interest costs are hovering near or above $1 trillion annually. The Congressional Budget Office projects roughly $1 trillion in fiscal 2026, with the interest tab potentially ballooning toward $2.1 trillion by 2036 under current law.

Here is where the math gets really ugly. Washington must refinance maturing debt while issuing still more debt to fund fresh deficits. Higher rates make rolling over old obligations costlier, swelling interest expenses, widening deficits, and forcing the Treasury right back into the market for additional borrowing.

The pain does not stay inside Washington. Treasury yields set the baseline for borrowing across the economy, so pricier government financing bleeds into mortgages, auto loans and business credit. Debt held by the public is already hovering around 100% of gross domestic product.