The Federal Government Will Spend $1 Trillion on Interest This Year — More Than the Entire Military Budget.

For every dollar Washington collects in taxes, 19 cents goes straight to renting money it already spent.

FY 2026 Federal Spending by Category

Social
Security

$1.69T

Medicare

$1.07T

Net
Interest

$1.04T

National
Defense

$0.89T

Medicaid

$0.71T

In FY 2019, net interest was $375B — it has nearly tripled in seven years.

Source: CBO, February 2026 Budget & Economic Outlook

You’d think the third-biggest line item in the federal budget would be something that actually does something. Build a road. Launch an aircraft carrier. Keep a hospital open.

It doesn’t.

In fiscal year 2026, the federal government will spend roughly $1.04 trillion on interest payments. Not paying down the debt — just renting it. That makes interest the third-largest expense in the entire budget, behind Social Security and Medicare. Bigger than the entire military. And it buys you... nothing.

Now... here’s what makes this worse. In 2019 — just seven years ago — that number was $375 billion. It has nearly tripled. And we didn’t get a single new thing for it. No schools. No border wall. No fighter jets. Just the carrying cost on $39.9 trillion in IOUs.

$100 for this… $500 for that. Here’s how to stop the bleeding today

$100 for this… $500 for that.

It seems to cost hundreds of dollars just to leave the house.

And even if you’re one of the fortunate few who’s comfortable or well-off, you’re not likely to be immune from the stress as friends and family members struggle all around you.

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According to USA Today, an increasing number of families are moving in together to cut costs, just like they did before the housing crisis in 2008.

Yahoo reports some retirees are even searching for roommates…

And to make matters worse, today’s crisis covers every generation.

But today, that could all change for folks who can see what’s coming… and, more importantly, for those who take action.

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Go here to see the full interview.

Chart of the Day — August 18, 2026

Everyone talks about the debt like it’s tomorrow’s problem. Something the next Congress will deal with. But $1.04 trillion a year isn’t theoretical. That’s real money being wired to bondholders right now — roughly 19 cents out of every dollar Washington collects in taxes. Before a single soldier gets paid or a single Medicare claim gets processed, nearly a fifth of your tax bill is already spoken for.

And the trajectory is the scariest part of all. CBO projects interest will hit $2.1 trillion by 2036. That means in ten years, the interest bill alone will be larger than Social Security is today. Let me put that differently: we will spend more money renting our past than funding our future.

The Takeaway

“In 2026, the federal government will spend $1 trillion just paying interest on money it already borrowed — nearly triple what it cost seven years ago. It doesn’t reduce the debt by a single dollar.”

Next time someone tells you the debt doesn’t matter because “we owe it to ourselves,” ask them this: if $1 trillion a year in interest doesn’t matter, why are we paying it? If you hold Treasury bonds or bond funds in your retirement portfolio, you’re on the receiving end of that money. But as a taxpayer, you’re also on the paying end. That’s worth a conversation with your advisor — not next quarter, this week.

More tomorrow. Stay sharp.

— Ray Calloway

Washington Will Spend $1.04 Trillion on Interest This Year — and Buy Nothing

The Federal Government Will Spend $1 Trillion on Interest This Year — More Than the Entire Military Budget.

$100 for this… $500 for that. Here’s how to stop the bleeding today

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