US National Debt Reaches $38.5T: Interest Costs Soar Beyond $1 Trillion Annually

Source: CryptoTale Original Title: Rising US Debt Pushes Interest Costs Beyond $1Trillion a Year Original Link: US federal debt reached a record $38.5 trillion in 2025, according to data tracking national debt from 2006 through February 2025. The report indicated debt rose $2.3 trillion in 2024, averaging $6.3 billion per day, with projections showing a climb to $40.0 trillion as early as August 2025.

Debt Growth Accelerates After 2020

The debt trajectory shows growth below $10 trillion in 2006, passing $20 trillion around 2017, then surging above $30 trillion after 2021 with an accelerating pace into 2025. A marked level places debt at approximately $38.51 trillion, with visual projections pointing toward $40.00 trillion within months.

Since 2020, total U.S. debt has increased by $15.3 trillion, with an average annual increase of $2.6 trillion, translating to approximately $285,733 per household.

Interest Costs Rise Dramatically

Federal interest payments have grown significantly. In 2020, interest costs totaled $345 billion, while six years later they reached over $1 trillion per year. Government data indicates approximately $6 billion per day is added to the national debt in 2025, equaling roughly $2.2 trillion annually.

For historical context, it took over 200 years for the U.S. national debt to exceed $1 trillion, which occurred in October 1981.

Treasury Holdings and Policy Responses

The Federal Reserve M2 money supply reached $22.4 trillion. Debt service now consumes a substantial share of federal revenue, surpassing categories such as defense spending.

Recent policy measures include tariff increases and government efficiency initiatives. Japan remains the largest foreign holder of U.S. Treasuries with over $1.1 trillion, while the United Kingdom has surpassed other nations as the second-largest foreign holder with over $800 billion in Treasury holdings, reflecting custodial arrangements linked to London’s role in global markets.

Amid rising debt concerns, some analysts increasingly view Bitcoin as a potential structural hedge against currency devaluation and fiscal uncertainty.