$41.7234 Trillion in the Red: U.S. Fiscal Debate Intensifies

The U.S. government's accounting net worth is projected to be minus $41.7234 trillion (approximately 59.122 quadrillion won) by the end of the 2025 fiscal year, reigniting debates over fiscal sustainability. The confirmed accounting structure shows that liabilities significantly exceed assets, leading to ongoing discussions about the long-term burden of U.S. finances.

According to the U.S. Department of the Treasury's financial report for the 2025 fiscal year, as of September 30, 2025, government assets were $6.0554 trillion (approximately 85.81 quadrillion won), while liabilities stood at $47.7788 trillion (approximately 67.713 quadrillion won). The total net worth, after subtracting these figures, was minus $41.7234 trillion.

The debate gained traction when Steve H. Hanke, a professor of applied economics at Johns Hopkins University, and David M. Walker, former U.S. Comptroller General, claimed in a March 23 column for Fortune that this figure indicated the U.S. government was in a state of insolvency. They proposed solutions through the fiscal committee bill H.R. 3289 and the fiscal responsibility constitutional amendment resolution H.Con.Res. 15.

However, the Treasury has not declared the U.S. government bankrupt. FactCheck.org clarified on April 7 that this characterization was not an official Treasury statement but rather an interpretation of opinion. It was also explained that the U.S. government has the authority to levy taxes and borrow, which cannot be viewed in the same manner as a private company's bankruptcy.

Accounting net worth is the balance sheet figure derived from subtracting liabilities from the assets held by the government. While a decline in this figure can signal increased fiscal burden, it is distinct from a legal assessment of solvency that incorporates the state's taxing power and monetary policy authority.

The Treasury report reflects this context. It explains that the calculation of net worth does not account for the value of non-operational assets or the rights to tax and monetary policy. While a deterioration in accounting net worth is indeed an indicator of fiscal pressure, it is not equivalent to a legal declaration of bankruptcy.

Long-term burdens are also confirmed by separate indicators. The Treasury presented the excess future expenditures over the present value of the Social Security and Medicare sectors at $88.4 trillion (approximately 12.5263 quadrillion won). This figure has increased by $10.1 trillion (approximately 1.4312 quadrillion won) from the previous year.

The long-term gap in social insurance differs from the legally recognized liabilities recorded on the balance sheet. It is an estimate of the difference between expected expenditures and revenues over the next 75 years, reflecting how aging and healthcare costs exert pressure on fiscal projections.

The public debt ratio remains a burden. The Treasury reported that public-held debt at the end of the 2025 fiscal year would be 99% of the Gross Domestic Product (GDP), and if current policies are maintained, it could rise to 576% by 2100. The Government Accountability Office (GAO) also assessed the U.S. fiscal path as unsustainable in a report released on June 11.

The GAO has issued a 29-year consecutive opinion denial regarding the federal financial statements for the 2025 fiscal year, citing significant weaknesses and limitations in financial management that make it difficult to provide an opinion on the entire financial statement. This is interpreted as a warning about the overall U.S. fiscal management system rather than a single figure.

The Joint Economic Committee (JEC) of the U.S. Congress reported a total debt of $39.38 trillion (approximately 55.801 quadrillion won) as of July 3. The same committee noted that total debt had increased by $3.16 trillion from a year earlier. Following the column by Professor Hanke and former Comptroller Walker, the U.S. fiscal debate has continued to revolve around medium- to long-term issues concerning debt, interest costs, and social insurance burdens.

In the crypto market, this issue is viewed more as a macro variable linked to dollar confidence, long-term interest rates, and risk-averse sentiment rather than a direct token issue. We previously reported on the correlation between U.S. real interest rates and Bitcoin demand.

However, there is no confirmed basis to assert that Bitcoin (BTC) prices moved solely due to this column or the Treasury report. CoinDesk analyzed on March 24 that Treasury yields and swap spreads could exert pressure on Bitcoin movements, but this is more an interpretation of macro stress at that time.

For domestic investors, the U.S. fiscal debate is a variable that encompasses dollar assets, long-term interest rates, and preferences for risk assets. If U.S. Treasury rates and dollar confidence waver, it could influence the discount rates and liquidity assessments across asset classes such as stocks, bonds, and cryptocurrencies.

Professor Hanke and former Comptroller Walker warned again in a follow-up column on July 15 that public debt had surpassed $31.68 trillion, exceeding 100% of GDP. With the Treasury's financial report for the 2025 fiscal year, the GAO report, and the JEC's total debt assessment continuing to unfold, the U.S. fiscal debate remains a significant issue surrounding long-term fiscal pathways rather than a mere controversy over expressions.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.