The US just crossed $40 trillion in debt and interest payments are now one of the government's biggest bills — bad news for the dollar, savers, and anyone on a fixed income.

• Interest on the debt now costs the government more per day than Medicare or defense, and it keeps climbing.
• The Treasury is buying back its own bonds with newly borrowed money to keep long-term rates from spiking.
• The Fed can set short-term rates but can't control the bond market, so cutting rates may just push inflation higher.
• Everyday costs are rising fast — beef, gas, electricity and water are all up sharply this summer.
• Japan is selling off US government bonds at a record pace, adding pressure.

Outlook: Expect more Fed and Treasury intervention in the bond market, with rising prices and a weaker dollar the likely price of keeping borrowing costs down.