FORTUNE Magazine, not exactly a radical left-wing progressive commie rag, has this story up today: 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. [not including social insurance programs such as Social Security and Medicare] . . . .
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 authors, Steve H. Hanke and David M. Walker, are a professor of applied economics and a former comptroller general of the United States, so they have street cred. They are, for the moment, correct that no other media seem to have picked up the story, though I did find this one from last May: The United States is insolvent, not bankrupt – yet:
The United States is insolvent. That’s not hyperbole, it’s a financial fact. We’re not bankrupt, at least not yet, and there’s a big difference between the two. Insolvency is when you can’t pay your bills when they’re due. When you can’t pay your bills and you can’t borrow the money to cover them, then you are bankrupt.
Les Rubin’s column, however, uses general numbers while the FORTUNE story is based on the official Treasury report. There’s no link in the article, but I did find this: Financial Statements of the United States Government for the Fiscal Years Ended September 30, 2025, and 2024 (PDF from the Bureau of the Fiscal Service). You have to scroll down a lot of pages, and I’m not an economist or accountant, so I may have missed a lot. But this one did jump out at me:
Balance sheets (page 65):
Net Position:
Funds from Dedicated Collections (Note 22) 3,545.9 3,707.3
Funds other than those from Dedicated Collections (45,269.3) (43,356.6)
Total net position (41,723.4) (39,649.3)
Total liabilities and net position 6,055.4 5,683.8
Columns are 2025 and 2024 (left to right), and amounts are in billions of dollars. This is approximately (as best I can tell) where the FORTUNE story got most of their numbers: “$6.06 trillion in total assets against $47.78 trillion in total liabilities.”
Guess what, folks: We’re broke. And the Treasury just admitted it (65 pages in). The narrative pages of the report don’t say that, of course; they just explain what each section shows and where the data comes from; a relatively quick skim found no analysis.
The FORTUNE authors acknowledge this is not easy reading:
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.
So they divided the numbers by 100 million and presented this example:
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.
The authors want a “Fiscal Commission Act,” proposed in Congress, which would
force a public reckoning with the facts, the trade-offs, and the hard choices that restoring fiscal health requires.
That sounds reasonable. Their other suggestion — an Art. V convention to write a balanced budget amendment — is just nuts. Just the amendment alone would be a invitation to disaster. And a Constitutional Convention is guaranteed to lead to all kinds of mischief, starting with declaring the US to be a “Christian nation.” NO. They are, at least, correct on this point:
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.
Not just Congress, though its dereliction of duty ranks high on the list of causes. The Trump administration has been (a) cutting taxes for all those those who can afford them and also (b) cutting projects (illegally) that it doesn’t like or that don’t benefit them while (c) spending money like a drunken sailor on personal pet projects, projects they’ve been “urged” to support, and of course war. Nothing like a good rousing war to get the blood going, erections rising, and money flowing.
