The Deficit Spending Problem With A Non-Political Fix

RIA · Jul 20, 2026

The national deficit debate usually focuses on entitlement and defense spending. While they have merit, they miss the single largest driver of America's deteriorating fiscal picture. After the pandemic-related deficits, the cost of borrowing itself, not spending, has been the biggest deficit buster. As shown in the first graph, in 2021, the government paid $482 billion in interest on $28.4 trillion of debt, at an average effective rate of 1.70%. Since then, interest rates have risen appreciably, with the interest on the federal debt for the current fiscal year expected to reach $1.35…