US interest payments on the national debt have passed defense spending for the first time, and the path ahead is bad for taxpayers, retirees, and anyone holding dollars.

• Interest on the debt is now the second-biggest item in the federal budget, behind only Social Security, and will top $1 trillion in 2026.
• Old cheap debt is being replaced at today's higher rates, so the interest bill grows faster than the economy — and if the average rate climbs high enough, interest alone would swallow every dollar of federal taxes.
• Foreign governments are quietly backing away: China has cut its Treasury holdings sharply, and central banks now hold more gold than US bonds, partly because freezing Russia's reserves in 2022 showed dollars can be taken away.
• With fewer buyers, the Fed has gone back to buying government debt — printing money, which shows up later as higher prices rather than a formal default.
• Thousands of "zombie" companies that survived on near-free loans are now failing, and business bankruptcies jumped 22% in 2024 — Spirit Airlines-style collapses with workers left holding the bag.

Outlook: Social Security's trust fund runs dry around 2032 with an automatic cut to checks, and the likely fix is inflating the debt away rather than any unpopular vote.