Tag: debt

The Treasury just declared the U.S. insolvent. The media missed it

The U.S. government is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, released last week to near-total media silence. The numbers: $6.06 trillion in total assets against $47.78 trillion in total liabilities as of September 30, 2025.

Importantly, the $47.78 trillion in reported liabilities does not include the unfunded obligations of social insurance programs like Social Security and Medicare — those are disclosed separately in the off-balance-sheet Statement of Social Insurance (SOSI).

The government’s consolidated balance sheet position, excluding the SOSI, deteriorated by nearly $2.07 trillion between FY 2024 and FY 2025, reaching a staggering negative $41.72 trillion. Total liabilities are now nearly eight times the value of reported assets. The largest drivers were a $2 trillion increase in federal debt and interest payable (now $30.33 trillion) and a $438.8 billion increase in federal employee and veteran benefits payable (now $15.47 trillion).

The Off-Balance-Sheet Iceberg

The off-balance-sheet picture is even more alarming. The 75-year unfunded social insurance obligation surged by $10.1 trillion in a single year, rising from $78.3 trillion in FY 2024 to $88.4 trillion in FY 2025 — driven primarily by a $6.9 trillion jump in projected Medicare Part B shortfalls and a $2.5 trillion increase for Social Security. The Treasury’s Statement of Long-Term Fiscal Projections shows the 75-year fiscal gap widening from 4.3% of GDP in FY 2024 to 4.7% in FY 2025.

If the $88.4 trillion in 75-year off-balance-sheet obligations were added to the $47.8 trillion in official balance sheet liabilities, total federal obligations would now exceed $136.2 trillion — roughly five times U.S. annual GDP.

The Government Accountability Office (GAO) issued a disclaimer of opinion on the U.S. government’s FY 2025 financial statements — the 29th consecutive year it has been unable to determine whether the statements are fairly presented. This is primarily due to serious, ongoing financial management problems at the Department of Defense and weaknesses in accounting for interagency transactions.

What $136 Trillion Looks Like in Your Living Room

Not only has the financial press ignored the consolidated financial statements, but most members of Congress and members of the general public will not read the consolidated financial statements. Documents like the consolidated financial statements are not the kind of thing you want to read before driving. If that’s not bad enough, most people cannot relate to the trillion-dollar numbers in the financial statements. Therefore, it is appropriate to translate them into terms that people will understand.

Most people cannot relate to trillion-dollar figures on a government ledger. So consider this: divide every number by 100 million — drop eight zeros — and federal finances look like a household budget in freefall.

That household earns $52,446 and spends $73,378 — running a $20,932 annual deficit. Its total liabilities and unfunded promises amount to $1,361,788 against just $60,554 in assets, leaving it $1.3 million in the hole. Uncle Sam, by any accounting standard, is insolvent.

Congress has clearly lost control of the nation’s finances. America is facing a fiscal catastrophe. The reckoning, long deferred, is becoming impossible to ignore.

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AI Won’t Fix America’s Looming Debt Crisis

Last month, Congress sparred with the president over a partial budget, but with few real cuts, America’s slow march toward an epic debt crisis went on undeterred. With over $38 trillion in debt and interest payments exceeding defense or Medicare spending, one would expect lawmakers to confront reality and do the difficult work needed to restore fiscal sanity. But why would they? Cutting entitlements and increasing middle-class taxes rarely make for winning campaign slogans.

It’s no surprise, then, that some prefer to pin their hopes on AI as America’s fiscal savior. Vanguard’s chief economist Joe Davis argued there’s as high as a 50 percent chance AI will prevent a debt-driven economic malaise. Elon Musk voiced a similar conclusion late last year, claiming AI and robotics are “the only thing that’s going to solve the US debt crisis.”

The argument goes like this: an AI boom drives explosive economic growth and tax revenue, while, at the same time, productivity gains impressively offset any upward pressure on interest rates. The deficit becomes a surplus and the overall debt shrinks, possibly disappearing entirely.

If that sounds less like a policy plan and more like a retirement strategy built around winning the lottery, you’re not wrong. The entire scenario hinges on a massive if: that AI generates extraordinary revenue and does it quickly enough to outrun rising interest costs.

But even if the government hits the tax revenue jackpot before Congress drives us off a fiscal cliff, it would be naïve to assume lawmakers would pay down the debt. 

The More the Government Gets, the More the Government Spends

For the sake of argument, suppose the tech optimists are right, and the federal government enjoys a massive AI-driven revenue windfall. Understanding what happens next requires understanding the incentives of politicians and their voters.

This is where public choice shines. Rather than assuming politicians and voters act in everyone’s best interest, this branch of economics recognizes that people don’t become angels once they interface with the government. Incentives matter, especially for politicians.

Incentives are why we have a deficit in the first place. The public isn’t particularly interested in financial restraint because high spending and low taxes benefit them now, and the resulting debt is some future generation’s problem. Politicians surely see the crisis brewing, but solving it is a sure way to get voted out of office. And so the incentive is to run constant deficits and grow the debt year after year, decade after decade.

Without changing incentives, it will be hard to avoid spending new revenue. Ballooning coffers mean voters will demand that the government dole out more goodies (especially if AI displaces workers along the way). Washington already excels at entertaining expensive ideas: healthcare subsidies for well-off families, a universal basic income, generous tax cuts, a fifty-percent increase in military spending, all despite the pushback the current deficit’s able to muster. Imagine the wish list after it drops even a little.

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Chicago Claims Its Budget is Balanced. Independent Audit Shows a $41.1 Billion Deficit.

The city of Chicago exists on another plane of the universe than the rest of us. It’s a place where up is down, black is white, and the basic laws of physics are held in abeyance so that when adding one plus one, any number that’s convenient (and politically viable) can be the answer.

In Chicago’s budget, the “new physics” includes the caveat that nothing is real unless we (the aldermen and the city’s hapless Mayor Brandon Johnson) say it is. And even then, nothing is permanent in this alternate plane of the universe. An equation that’s “true” today may not be so “true” tomorrow.

Do you think I’m being facetious? 

“Chicago finished fiscal year 2024 with a $41.1 billion gap between the money it has available to pay bills and the obligations it owes, according to a new report from Truth in Accounting, placing the city among the worst financially managed major cities in the nation,” according to The Center Square.

That’s only half the story. The city denies there’s a deficit at all. City officials say (how can they not giggle when saying this) the budget is balanced.

Truth in Accounting CEO Sheila Weinberg clears up any ambiguity.

“They only include the expenses they’ve paid, not all the expenses they’ve incurred,” Weinberg said. “They also include loan proceeds as revenue and still claim the budget is balanced. In the real world, borrowing money to balance your budget would be insane. But in government budgeting, that’s how they do it.”

One person’s “insanity” is another’s denial of reality.

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“Train Wreck” US Adds $481 Billion In Debt In 3 Months

The government hit the debt ceiling back in January which blocked any net new debt from being created from January to June. Once the debt ceiling was lifted, the government wasted no time in catching up for all the months where borrowing was frozen. Over the last 7 months, the government borrowed an incredible $2.28T!

Note: Non-Marketable consists almost entirely of debt the government owes to itself (e.g., debt owed to Social Security or public retirement)

January was a very small month, but the chart below shows that $2.3T was borrowed for all of 2025. This follows $2.6T and $2.2T in 2023 and 2024. Needless to say, there seems to be a new standard of $2T+ annual borrowing. This will likely mean adding $10T every 4 years at current rates. More than likely that is going to accelerate going forward.

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China calls on banks to limit exposure to US debt – Bloomberg

China has urged its banks to curb their exposure to US government debt, citing market volatility and growing financial and geopolitical risks, Bloomberg has reported citing people familiar with the matter.

Over the past decade, China has steadily trimmed its US Treasury holdings, a shift that has seen it overtaken by Japan and the UK as the largest foreign holders of American debt. Since peaking at around $1.3 trillion in 2013, its holdings have fallen roughly by half to about $650–700 billion, reaching levels not seen since 2008.

Beijing has advised China’s major financial institutions to limit new purchases of US government bonds and reduce positions where exposure is high, according to sources who spoke to the outlet on Monday. The guidance reportedly does not apply to Beijingss’s official state holdings.

According to the report, which cited China’s State Administration of Foreign Exchange, Chinese banks held about $298 billion in dollar-denominated bonds as of September. It is unclear how much of that total consisted of US Treasuries.

The guidance, reportedly intended to diversify market risk, came ahead of last week’s phone call between Chinese President Xi Jinping and his US counterpart, Donald Trump. In October, the two leaders agreed to a one-year trade truce, under which tariffs and export controls on each other’s goods would be lowered.

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“Out Of Touch”: Marylanders Fume As Gov. Moore Prioritizes Building Energy-Hungry ‘Sphere’ Amid Power Bill Crisis

Marylanders are raging at left-wing Governor Wes Moore, accusing him of fast-tracking a massively power-hungry Sphere entertainment venue near Washington, DC, while working-class households across the central part of the state are drowning under crushing electricity bills.

“So this Governor spends money he doesn’t even have yet. 200 million dollars of the cost for the Sphere at National Harbor will come from the State of Maryland’s 2027 budget. He is so out of touch with what MD residents need and doesn’t care as long as his name is in the headlines every day,” Maryland resident Amy Milberger Seaman wrote in a Facebook group called “BGE Victims,” which has nearly 15,000 residents upset about exploding power bills.

Local media outlet WBAL-TV reported Monday that Sphere Entertainment plans to build its second U.S. Sphere venue in National Harbor, in Prince George’s County.

The Sphere will be slightly smaller than the one in Las Vegas, seating 6,000. Gov. Moore called the project the largest economic development project in the county’s history. The venue is expected to be funded through a mix of public and private financing, including $200 million in incentives from the state.

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Trump Administration Says Banks Will Soon Begin Distributing ‘Trump Cards’

A “Trump card” with an interest rate of 10 percent could be coming to Americans through banks that want to join President Donald Trump in lowering credit card rates.

Kevin Hassett, the director of the National Economic Council, said the concept of a one-year cap of 10 percent could be implemented voluntarily without needing to go through Congress.

“Our expectation is that it won’t necessarily require legislation, because there will be really great new Trump cards presented for folks that are voluntarily provided by the banks,” Hassett said on Fox Business.

“We’ve been in conversations with the big banks, with CEOs of many of the big banks who think that the president is on to something, that he’s got a great idea,” he said.

Banks “could potentially voluntarily provide for people who are in that sort of sweet spot — not having financial leverage very much because they don’t have access to credit, but they have enough income and stability in their lives that they’re worthy of credit,” Hassett said.

Trump kicked off the idea in a social media post earlier this month.

“Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration,” Trump posted on Truth Social, adding “AFFORDABILITY!”

“Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%,” Trump posted.

“Coincidentally, the January 20th date will coincide with the one year anniversary of the historic and very successful Trump Administration. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN! PRESIDENT DONALD J. TRUMP,” he wrote.

Trump pushed the interest rate cap along with banning large institutional investors from buying single-family homes and a push to have Fannie Mae and Freddie Mac buy $200 billion in mortgage bonds to lower mortgage rates, according to The Hill.

Banks panned Trump’s concept.

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Bank Sues Former Chicago Mayor Lori Lightfoot for Refusing to Pay Bill for 17 Months

JPMorgan Chase Bank is suing former Chicago Democrat Mayor Lori Lightfoot for letting her $11K credit card bill go unpaid for 17 months.

The media has learned that Lightfoot, who became the first Democrat Chicago Mayor not reelected to city hall in about 40 years, was served with a subpoena at her $900,000 Chicago home in October, the Chicago Tribune reports.

Chase ultimately decided in March that her $11,000 bill would be a charge-off, but her last payment of $5,000 on the debt was made on August 7, 2024, according to the bank’s records.

The bank reported that Lightfoot has had the card since 2005.

Lightfoot seems to be struggling to pay her bills despite claiming $402,414 in adjusted gross income in 2021 alone. The Tribune also notes that records show Lightfoot took out $210,000 in early distributions from her retirement account. She also earned $216,000 during each of her four years in office.

The ex-mayor seemed to have just as much trouble paying the bills for the city when she was mayor. As she was headed out of office in 2024, for instance, the city was suffering under an $85 million budget shortfall.

Lightfoot’s next appearance in court for her credit card debt is scheduled late this year.

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DNC ‘drowning’ in nearly $16M of debt — and pointing fingers as failed 2024 Biden-Harris campaign haunts Dems

The Democratic Party’s principal fundraising committee saw donations slump in the second-to-last month of the year, recording just a $12 million campaign war chest and almost $16 million still in debt due to a loan taken out the previous month, Federal Election Commission filings show.

The fundraising doldrums come amid party infighting over whether to release a 2024 autopsy report on the failed Biden-Harris campaign and pressure ahead of the critical 2026 midterms, in which Democrats want to retake Congress.

The Democratic National Committee listed a little more than $12.6 million cash on hand, $10.7 million raised, and $15.9 million in debts in its FEC filing for November, with national Republicans accusing their opponents of “drowning” in their obligations to pay off bills.

That puts the DNC only a few hundred thousand dollars ahead of the Republican National Committee (RNC) for that month’s fundraising — but far behind the GOP’s $89.9 million cash on hand and lack of outstanding debts as both parties look ahead to the 2026 midterms.

From Nov. 1 to 30, the DNC actually lost roughly $6 million from its campaign war chest with spending having outpaced its donations. The month before, it had also raised $23 million — more than double its November haul.

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Jasmine Crockett’s Finances Exposed – Subject to Personal Liens While She Spends $50k-100k of Taxpayer Cash on Limos, Luxury Hotels Just This Year

If the new congressional maps enacted by Texas Republicans stand until 2026, which it appears that they will, Rep. Jasmine Crockett would likely be out of a seat.

To everyone else, this is pretty much a win-win; I’m going to assume that this includes Democrats, who must be tiring of her antics by now, particularly given her lack of substantive support to the party’s caucus in the lower house. For Crockett, it’s a big lose — because not only will she be out of the corridors of power, but out of ways to spend the taxpayer’s money, as well.

And boy, does she spend it. That’s why her Senate run is so important to her, and soon to be loathed by the Democrats. Not only does it put the left’s one big potential upset of 2026 out of reach for them, most likely, but it also means that Crockett’s profligate spending — while she had a three-grand lien on her condo, no less — is going to be front-page news for a while.

So, in case you missed it (no shade; keeping up on all things Jasmine-related has shaved at least 5 IQ points off my poor, addled brain), Rep. Crockett announced Monday that she was running for GOP Sen. John Cornyn’s seat in the upper chamber.

“Trump, I know you’re watching, so let me tell you directly,” Crockett at her announcement event, according to CNN. “You’re not entitled to a damn thing in Texas. You better get to work because I’m coming for you.”

Dun dun DUN! Be scared, Donald. Be very scared.

Actually, the environment is probably one of celebration rather than anxious celerity on the part of state Republicans. Unlike the usual Democratic saber-rattling about turning Texas purple, this time they looked like they actually had a shot. A divided GOP is likely to mean that Cornyn doesn’t emerge from his own primary as the nominee, with state Attorney General Ken Paxton leading the way in polls.

Paxton is a little bit more MAGA but a lot more controversial than the other Republican challengers, and while he does well in a GOP primary he’s not necessarily the candidate you want to go into a general election with.

On the other hand, pretty much every character issue you can bring up about Paxton goes out the window the moment Crockett gets the Democratic nomination — which she instantly becomes the favorite for. Paxton could be accused of the most abhorrent thing you can think of — do it on live TV, even — and he’d still be considered a near-lock to win the general election.

To that end, too, Crockett has shoved the one candidate who’s remotely electable out of the running — former U.S. Rep. Colin Allred — leaving Crockett to duel it out with James Talarico, a progressive state representative who once said during a floor speech that “God is nonbinary” and somehow managed to dodge the ensuing lightning bolt from the empyrean.

But let’s not talk about the gift that is Crockett’s statewide unelectability. Let’s instead take a look at the gift that is Crockett’s finances for a moment.

According to Fox News, the Dallas County Clerk’s website shows that Crockett — who makes $174,000 a year in her position as a congresswoman — is currently behind on her payments to the Westside Condominium Association by $3,047.79.

The unpaid lien notice dates from over a year ago.

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