The United States has accumulated more than $40 trillion in national debt. That’s a number so large it’s difficult to comprehend, let alone imagine paying back. While government spending often becomes a political debate, the financial consequences deserve attention regardless of which party is in power.

The national debt represents decades of accumulated federal budget deficits. Simply put, when the government spends more than it collects in revenue, it borrows the difference. Imagine if we all managed our household finances that way. Of course, most of us would eventually find our credit cards declined.

Our current situation didn’t develop overnight, nor can it be blamed on any single administration. Wars, recessions, tax reductions, increased spending and emergency stimulus programs have all contributed. The 2008 financial crisis and COVID-19 pandemic were particularly significant borrowing periods.

An aging population and rising healthcare costs have also increased spending on programs such as Social Security and Medicare.

For years, historically low interest rates made borrowing relatively inexpensive. But as rates have increased, so has the cost of financing our national debt.

When the government borrows money, it issues Treasury securities to investors. As borrowing needs grow, the government must continually find buyers for an increasing amount of debt.

While many factors influence interest rates, greater government borrowing can put upward pressure on long-term rates, particularly when investors demand higher returns.

This matters because Treasury yields influence borrowing costs throughout the economy. Higher rates can mean more expensive mortgages, business loans and other financing.

Over time, these higher borrowing costs can discourage businesses from expanding, make homeownership less affordable and slow economic growth.

There’s also an unfortunate cycle. Higher interest rates mean larger government interest payments, which contribute to bigger deficits and potentially even more borrowing.

Perhaps the most concerning consequence is the growing amount of money the government spends simply paying interest.

The Congressional Budget Office projects federal interest costs of about $1 trillion in 2026. That’s money spent servicing yesterday’s debt rather than funding today’s priorities.

Think about your own finances. If an increasing portion of your paycheck went toward interest payments, you’d have less available for everything else.

The federal government faces similar tradeoffs. As interest costs grow, difficult decisions regarding taxes, spending and government programs could become increasingly unavoidable.

While debt doesn’t automatically cause inflation, persistent deficit spending can contribute to inflationary pressures. For retirees, even modest inflation can gradually erode purchasing power over a 20- or 30-year retirement.

The national debt doesn’t mean an economic crisis is inevitable. The United States maintains significant economic advantages, including the dollar’s role as the world’s primary reserve currency.

The bigger concern may not be a sudden financial collapse, but rather the gradual consequences of carrying an increasingly expensive debt burden: higher borrowing costs, slower economic growth and pressure on government programs.

For investors and retirees, the answer isn’t to make dramatic portfolio changes based on predictions about Washington. Instead, focus on diversification, accounting for inflation and building a financial plan capable of weathering different economic conditions.

We can’t control the nation’s finances, but we can certainly take steps to better manage our own.

Collin Randall, CFA, CFP, is a financial adviser at Randall & Associates Wealth Management, with offices in Butler and Warrendale. Randall & Associates Wealth Management Inc. is a registered investment adviser and does not provide any legal, accounting or tax advice. The opinions expressed here reflect the judgment of the author as of the date of the article and are subject to change without notice.