$40 Trillion Debt Looms as Economic Headache for Americans

The US national debt has surpassed $40 trillion, sparking debate over its impact on the economy and borrowing costs. The Congressional Budget Office (CBO) projects that by 2036, net interest will more than double to $2.1 trillion, accounting for nearly half of all federal discretionary spending.

The growing national debt can put upward pressure on interest rates, making it more expensive for individuals to take out mortgages or other loans. However, mortgage rates are influenced by a range of factors, including inflation and Federal Reserve policy, rather than the national debt alone.

While the CBO warns that sustained large deficits and growing debt could slow economic growth and increase interest costs, it notes that the US is not currently in a debt crisis. The agency projects that federal debt held by the public will equal 120% of GDP by 2036, exceeding the previous post-World War II record.