Something’s Gotta Give. America’s $1 Trillion Interest Problem

Chart of the Week #52

On Thursday, in a piece about Stephen Miran’s recent speech (where he confirmed Trump’s Reset), I mentioned how something called Triffin’s Dilemma is forcing the U.S. to run trade deficits, rack up massive debt, and watch interest payments explode.

Speaking of exploding interest payments—those have now crossed $1.12 trillion for the first time in history. That’s what this week’s chart shows below.

Keep in mind, this is purely the cost of servicing Uncle Sam's monumental debt. None of it goes toward paying down the principal.

To put it in perspective: $1.12 trillion is bigger than the entire economy of most countries. It’s larger than Turkey’s economy, and almost double the size of Thailand’s.

It also dwarfs just about everything else in the government’s budget—even the military-industrial complex’s sacred cow. In fact, interest is now the second-biggest budget item, behind only Social Security.

Now here’s where it gets truly alarming. That $1.12 trillion interest bill represents a 36% increase from just two years ago. That’s not a typo. In just two years, the cost of servicing our debt jumped by more than a third. Take another look at that spike in the graph above.

And it really is a terrifying amount that gets extracted from Americans every month. Take last month, for instance.

According to the latest Monthly Statement of the U.S. Treasury (page 9) gross interest paid in March amounted to $104.4 billion — or about $3.4 billion per day. That's a staggering 56% of the $185 billion the government collected in income tax receipts (page 4).

Put simply, 56 cents of every dollar you paid in income tax in March went to cover interest on the debt.

At this pace, interest payments are on track to smash through $1.2 trillion by the end of the fiscal year—based on the Treasury’s own projections.

It remains to be seen if Trump’s team can actually pull off their plan to turn Washington’s towering debt into leverage — and reorient the entire global economic structure in America’s favor, like Miran outlined.

But one thing is clear: something’s gotta give.

Have a great rest of your weekend,

Lau Vegys