The Congressional Budget Office’s new 10-year fiscal forecast includes plenty of headlines: The nearly $2 trillion federal budget deficit will grow to more than $3 trillion in a decade. The national debt is now greater than the total output of the entire US economy.

But those numbers are too big to comprehend. Instead, let’s focus on something more understandable: How much of the federal income tax paid by individuals and corporations does government spend on interest on its enormous debt? Answer: One dollar of every three.

This year, the feds will pay bondholders about $1 trillion in interest. Assuming, of course, interest rates on Treasury securities remain relatively low. Two decades ago, the government paid $184 billion. A decade from now, it will spend $2.1 trillion—twice what it spends today. As a share of the entire US economy, interest costs have more than doubled from 1.4% to 3.3%. And in another decade, they’ll grow to 4.6%

To put it another way, the federal government will be spending almost 5% of the nation’s total economic output to pay interest on its debt.

CBO estimates that, if nothing changes, by 2036 the feds will be spending more money on interest than on any program except Social Security and Medicare. Twice the defense budget. Twice the rest of the budget Congress votes on each year. More than double average interest costs over the last 50 years, measured as a share of Gross Domestic Product.

The Bottom Line

And here is the taxpayer’s bottom line: Two decades ago, the government spent the equivalent of about 15% of federal corporate and individual income tax revenue on interest. This year it will spend about one-third. And in another decade, it will need a staggering 45 cents of every income tax dollar to pay interest on the debt.

Think about it: The government will send an amount equal to nearly half the income taxes you pay to the investors who buy government bonds. That money won’t be available for health care, national security, or national parks. If you don’t like government spending, think about how much Congress could cut taxes if it was not using the money to pay interest to Treasury bondholders.

Public debt (not counting what the government borrows from itself for programs such as Social Security) will top $32 trillion this year. Who owns those bills and bonds? Who will collect all that interest we are paying?

Foreign investors, including governments, own about $9 trillion. The biggest holders: Japan, the United Kingdom, and China. The other big investors are domestic mutual funds and the Federal Reserve, which uses those bonds to help manage interest rates.

Interest Rate Risks

But in response to aggressive trade initiatives or military threats by the US, China and other countries are dumping their US bonds.

And President Trump’s nominee to chair the Federal Reserve, Kevin Warsh, has for years pushed the Fed to sell much of its portfolio of Treasury securities and other US debt, including mortgage debt.

To the degree these lenders sell off their Treasuries, interest rates on those bonds will rise and the share of income tax payments needed to support all that debt will grow even more.

If the nation faces another bout of inflation, perhaps because of increased cost of goods caused by tariffs, interest rates also will rise and still more tax payments will be drained by the need to pay interest on the nation’s debt.

Hard Choices

Reducing the federal debt, and the interest costs that accompany it, inevitably will require tax increases and spending cuts. Politicians, who much prefer cutting taxes and increasing spending, won’t make tough deficit-reducing votes unless voters start to balk at the price they pay for fiscal irresponsibility.

Usually, that pain is framed as higher interest rates. And, in fairness, it has been hard to argue that rising federal debt since the turn of the century has had any impact on those rates. Indeed, we have been in a period of historically low rates for two decades, despite the modest uptick in recent years.

The US has been awash in money for consumers and business. The fear that massive federal debt would crowd out other borrowing, and thus raise rates, has proven to be overblown, at best. At least so far.

But there is another price for big deficits. Less salient, perhaps, than a spike in mortgage interest, especially since Congress has been happily cutting taxes for much of this century. But imagine how much more those taxes could be cut or how much more government could help families if so much federal revenue wasn’t going to Treasury bondholders.