Transcription
It's official. The federal government is bankrupt. Unless you live under a rock, you knew this. But they're admitting it is comforting or perhaps terrifying.
Last week, the Department of Treasury released its consolidated financial statements for fiscal 2025, reporting that the federal government has just over 6 trillion in assets. So that's land, buildings, student loans. But according to Treasury, it has nearly 48 trillion of debt, coming to negative 42 trillion net worth, which is roughly half a million for a family of four and getting worse at 2.5 trillion per year.
Now, you'll notice 48 trillion of debt is higher than the official national debt, which just crossed 39 trillion 2 weeks ago. Congratulations, Congress. And that is because there's trillions of so-called non-debt liabilities like federal employee pensions or loan guarantees where government guarantees crony loans since it looks better than writing checks.
No, Treasury's tally excludes an additional 88 trillion in so-called off-balance sheet debt made up of social security, Medicare, and yet more pensions the government has promised to pay and will pay given all of these are politically untouchable. Those went up nearly 10 trillion last year with Medicare and Social Security shortfalls, which is more than a third of GDP per year.
It's worth noting for the 29th year in a row that the GAO, the federal government's auditor, stuck a big disclaimer saying this is only the debt they could find. There could be a lot more. Nobody knows. Certainly not the department that's supposed to know.
Put it together and it's $136 trillion of debt, just shy of a gazillion, rising by 12 trillion per year. Put differently, one-third of everything you made last year, every morning you got up and go to work, it went to taxes. Another third was earmarked for future government spending, you lived on the crumbs.
Now, to put this all into concrete numbers, a typical American family makes $80,000 a year, has between $150 and $200,000 of regular debt, mortgage, cars, credit cards, and apparently they owe $1.5 million of government debt, rising at $3,000 per month. And of course, that's just the debt Treasury knows about.
So, as Alex to buy Trust Capital, the war is hogging the headlines at the moment, but behind the scenes, we are headed off a fiscal cliff. They'll borrow as much as they can, apparently 136 trillion so far to postpone the crash. That day when lenders stop, market interest rates spike to double digits and we get a financial crisis that makes 2008 look like a picnic.
The solution is very easy: federal spending by a couple trillion. Maybe hold off on wars for a couple decades. Close some Somali Laring centers. Perhaps even a balanced budget amendment or my personal favorite, Warren Buffett's proposal that if Congress can't pass a budget, they have to resign and are banned from politics for life. Of course, none of this will happen because for both parties, kicking the can is a lot more fun than slashing Washington.
Read the rest with charts and all the gory details at propsynnows.com. Okay, we'll be watching. See you next time.