Good morning, it's Friday, August 21. The national debt crossed $40 trillion this week — just five months after hitting $39 trillion — and the government now pays more in interest on that debt than it spends on national defense.

Also in today's issue: Trump-Cohen radio reunion, ICE grievance system collapse, Florida's primary upset, Iran sanctions escalation.

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The U.S. government is now paying $3 billion a day in interest on its debt. Not on schools. Not on roads. Not on defense. Just interest — the cost of money already borrowed and already spent.

And if you have a mortgage, a car loan, or a credit card, you're already feeling the fallout. The 30-year Treasury yield — the rate the government pays to borrow money for three decades — hit 5.34% this week, its highest level in 19 years. That pushes up borrowing costs across the board. Mortgage rates have climbed to 6.8%, the highest in over a year. For a family buying a $350,000 home with 20% down, that means roughly $250 more per month than what they would have paid in February, when rates were closer to 6%. Over the life of a 30-year loan, that's about $90,000 in extra interest — gone before a single room gets painted.

Now look — the debt crossing $40 trillion wasn't a surprise. But the speed is what should concern you. It took just five months to go from $39 trillion to $40 trillion. Five months before that, it hit $38 trillion. The national debt has doubled since January 2017. At this pace, the Peter G. Peterson Foundation warns, we'll reach $50 trillion in six years.

Here's the thing. The government now spends more on interest payments than on the entire military budget. That's the fastest-growing line item in the federal budget — not Medicare, not Social Security, not defense. It's the bill for debt we've already run up.

And the situation just got worse. The Congressional Budget Office raised its 2026 deficit forecast to $2.1 trillion — up $200 billion from its February estimate. The reason is almost entirely on the revenue side. The Supreme Court struck down President Trump's tariff program in February, ruling he lacked authority to impose those levies under a law called IEEPA — the International Emergency Economic Powers Act. The Treasury has since refunded roughly $100 billion in import taxes that were collected without legal backing. That revenue had already been counted. Now it's gone, and the hole in the budget is real.

The Treasury Department's response this week tells you how nervous officials are. Secretary Scott Bessent announced the government would at least double its buyback of long-term bonds — from $2 billion to at least $4 billion per operation — to steady a shaky market. Yields dipped briefly. But analysts at Barclays and Evercore questioned whether the relief would last. One called it a "tactical" move in thin summer trading — not a structural fix. This was the second time this month Bessent stepped in to calm markets, after intervening to prop up the Japanese yen just weeks earlier.

Here's the honest truth: both parties own this. The 2017 tax cuts added trillions. Pandemic spending added trillions more. The Iran war is adding billions each month. And no one in Washington has a plan to change direction — not before the midterms, and probably not after. The Committee for a Responsible Federal Budget put it plainly: $40 trillion in debt doesn't stay on the government's ledger. It finds its way into your pocketbook. If yields stay this high, every American family trying to buy a home, finance a car, or carry a balance is going to keep paying the price for Washington's refusal to make hard choices.

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Trump and Cohen reunite on a New York radio show — and the strangeness is the story. President Trump appeared Thursday on the 77 WABC program of Michael Cohen, his former personal attorney who served prison time after pleading guilty to campaign finance charges and lying to Congress. Cohen was the lead witness in Trump's 2024 criminal hush money trial, once calling him a "racist, con man and a cheat" before Congress in 2019. The interview, first reported by the Associated Press, was remarkably friendly. Trump told Cohen he'd been "weaponized" by prosecutors. Cohen quoted the Bible on forgiveness. The full interview airs Sunday on Cohen's show, "When You Know… You Know." Whatever you call this, it isn't accountability — it's a witness who helped secure 34 felony counts making public peace with the man he testified against, while that man holds the presidency.

The system designed to protect people in ICE detention has collapsed. An NPR investigation published Wednesday found that the grievance system inside immigration detention — the one formal channel for reporting abuse, medical neglect, or unsafe conditions — is now barely functioning. The administration cut the Office for Civil Rights and Civil Liberties from roughly 150 staff to a handful in 2025, freezing over 500 active complaints. At least 53 people have died in ICE custody since Trump's second term began. Separately, a Guardian investigation found the government sought court orders to force-feed at least 18 hunger-striking detainees. At least three were subjected to nasogastric tube feeding — a tube pushed through the nose and into the stomach. The World Medical Association calls the practice a violation of medical ethics.

Florida state Rep. Angie Nixon defeated Alexander Vindman 56%–44% in Tuesday's Democratic Senate primary — despite being outspent 16-to-1. Vindman, a retired Army lieutenant colonel who testified during Trump's first impeachment, raised over $16 million. Nixon, a 42-year-old former union organizer from Jacksonville and member of the Democratic Socialists of America, raised under $1 million. She ran a ground-level campaign in signature hot pink, driving herself to events across the state. Nixon will face appointed Republican Sen. Ashley Moody in November for the seat vacated by Secretary of State Marco Rubio. In a low-turnout primary with no public polling, door-knocking beat a war chest — a result that caught even Nixon's opponent off guard. Vindman had already booked a post-victory fundraiser on Nantucket.

President Trump on Wednesday threatened a "crushing economic operation" against Iran. Treasury Secretary Bessent promised "the toughest sanctions in history" and told CNBC the administration would "collapse this regime." Oil jumped past $93 a barrel after the UAE suspended all financial transactions with Iran — cutting off roughly 23% of Iran's total trade. At the pump, the national average hit $4.10 per gallon, the highest August on record and 38% above pre-war levels, according to AAA data. Diesel reached $5.55, up 48% since the war began in February. Those diesel costs don't just hit truckers — they ripple through every supply chain to grocery shelves, construction sites, and kitchen tables across the country.

That's what the U.S. government now pays every single day in interest on its national debt, which crossed $40 trillion this week. Interest costs have surpassed defense spending and are on pace to exceed $1.1 trillion for the year, according to Treasury Department data.

P.S. Should Congress cap the deficit before voting on new spending? Hit Reply — one word is enough.