The United States recently surpassed $40 trillion in national debt, doubling in less than a decade — and showing no signs of slowing down. The rising debt adds upward pressure to interest rates, increasing costs across the economy. A new analysis from the Center for American Progress (CAP) examines the economic implications of the rising debt for American families and businesses.

CAP’s report finds that the national debt contributes to:

1. Higher interest rates. Interest rates are approximately 1.36 percentage points higher today due to the amount of national debt accumulated over the past 25 years.
2. Higher costs for households. As a result of higher interest rates, rising debt is estimated to cost $4,500 annually for a household that has a mortgage, a new auto loan, and an undergraduate student loan.
3. Higher costs for businesses. Rising debt is also estimated to cost an additional $327 per month for a small business loan, or $39,190 over a standard 10-year term.
4. Greater burden on younger generations. Younger Americans are likely to bear a disproportionate share of growing borrowing costs. As the rising debt drives up interest rates, younger generations will take out new debt and hold loans with higher interest rates, while older generations who have secured lower interest rates on their loans will be less exposed to rising rates.
5. Slower wage growth. Over the next 30 years, the growing debt-to-GDP ratio is expected to slow average annual wage growth by $4,200, compared to if the ratio were stabilized.

The latest report from CAP underscores how the rising national debt imposes real costs on Americans, contributing to their affordability concerns and jeopardizing their economic security. America’s fiscal challenges are serious, and lawmakers should prioritize responsible solutions to put our nation on a stronger, more sustainable path.