A U.S. ‘debt spiral’ could start soon as the interest rate on government borrowing is poised to exceed economic growth, budget watchdog says
Fortune
by Jason MaFebruary 14, 2026
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The U.S. government is facing a critical warning from the Committee for a Responsible Federal Budget (CRFB) about an impending "debt spiral." As the interest rate on federal borrowing approaches or surpasses economic growth, the nation's fiscal health could deteriorate rapidly. With total public debt already at $31 trillion and 100% of GDP, projections show it will exceed record levels by 2036, reaching 120% of GDP. This escalation is driven by rising interest costs, which are expected to more than double over the next decade, consuming a growing share of federal spending.
The root cause lies in climbing bond yields as the Federal Reserve raises rates and global concerns about U.S. financial reliability. The Congressional Budget Office (CBO) predicts that the average interest rate on federal debt will surpass nominal GDP growth by the end of the decade, signaling a dangerous tipping point. This would amplify deficits and make it harder to manage spiraling debt levels.
The situation is compounded by legal challenges to Trump-era tariffs, which have temporarily boosted revenue but are under scrutiny. If courts rule against these tariffs, deficits could surge to $3.8 trillion in 2036, pushing debt to 131% of GDP—a significant escalation beyond current projections. This would heighten the risk of a fiscal
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Originally published on Fortune on 2/14/2026