mark this summer, raising concerns at home and abroad. It took nearly 200 years for US debt to first reach $1 trillion in 1981. That milestone was treated as a wake-up call, with President Ronald Reagan declaring in a televised address, "If we as a nation needed a warning, let that be it." Today, the country spends more than that just on interest payments. The steady rise to $40 trillion was driven by public spending surges under both the Trump and Biden administrations. Ballooning costs for social programs and other spending have outstripped revenues undermined by tax cuts, while responses to crises like the 2008 financial crash and the Covid pandemic fueled borrowing. Recent inflation shocks and higher interest rates have made matters worse. At the start of Trump's first term in 2016, debt stood at just under $20 trillion—it has doubled in the decade since, now rising by roughly $90,000 every second. Eric Swanson, a former Federal Reserve economist, notes the key difference from a decade ago: interest rates. Long-term rates are at multi-decade highs, partly reflecting inflation fears and partly investors' wariness of massive government borrowing. Tech firms borrowing heavily to fund AI are also competing with the government for capital. Rising rates make funding the deficit pricier. Interest payments on government debt are now 15% higher than a year ago and consume nearly 20% of tax revenue—more than the defence budget. Yet economists stress the situation isn't critical. The US benefits from being the world's largest economy with the dollar as the global reserve currency, giving it a "much longer runway to fiscally misbehave." Its debt-to-GDP ratio of 126% is actually lower than Japan's and Italy's. Still, investor appetite for US bonds is diminishing, risking a vicious cycle of ever-higher required returns. Higher US borrowing costs spill over, raising costs for other countries too. Charlie Bean of the London School of Economics warns there may be a tipping point that triggers a bond fire sale and financial turmoil—but no one knows exactly where it is. "It's not as if there's a fixed number," he says. "We don't know where it is." (BBC)