Aug 20, 2026 · 8 min
Debt’s interest costs are reaching American households
The U.S. national debt is $40 trillion. Are Americans paying for it?
The debt’s trajectory could shape taxes, public spending and the interest rates Americans pay on mortgages, loans and credit cards.
- 1The $40 trillion milestone matters less than whether policymakers can slow the debt’s growth and rising interest costs.
- 2Government borrowing can push up household borrowing costs by putting upward pressure on interest rates.
- 3Stabilizing the debt likely requires politically difficult choices, while relying on extraordinary growth remains a risky bet.
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Martha Gimbel rejects the idea that unprecedented economic growth can safely substitute for confronting taxes and spending trade-offs.
The brief
The national debt has reached $40 trillion, but the episode argues that the more consequential question is whether its trajectory—and the government’s interest bill—can be changed.
Martha Gimbel of the Yale Budget Lab explains how Treasury borrowing can put upward pressure on interest rates, affecting mortgages, loans, credit cards and other household borrowing.
Borrowing can be justified for crises or major investments, but higher debt and interest rates make today’s trade-offs harder than they were after the 2008 financial crisis.
The available remedies are politically painful: raise taxes, cut spending, or achieve unusually strong economic growth. Gimbel warns that betting on unprecedented growth, including through artificial intelligence, is risky.
Featuring
Juana Summers
The Atlantic
United StatesListen to the full episode and explore every guest, topic, and moment on PodLume.