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The U.S. government spent $659 billion this year paying off the interest on its debt, according to a Treasury report released Friday, as the nation’s widening fiscal imbalance and the Federal Reserve’s rate increases dramatically raised the federal cost of borrowing.
Because the federal government spends more than it collects in tax revenue, the Treasury Department issues new debt to cover the rest of its payment obligations. That debt must be repaid with interest costs that grow as the debt grows, and as the central bank has raised interest rates to cool inflation, the borrowing costs to the U.S. government are also way up.