America's debt is getting more expensive

Governments around the world are entering a new era of higher borrowing costs already deeply indebted . More revenue will go toward interest payments as old debt gets refinanced at today's higher rates.

America is already watching that dynamic play out: Annualized interest costs have reached $1.2 trillion, exceeding defense spending.

What they're saying: "The government consistently rolls over portions of its debt at market prices, so the effective interest it pays on its entire debt stock slowly rises in a high-rate environment," economic researchers at Charles Schwab wrote Tuesday morning in a note titled "America's New Debt Reality."