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In a March 23 op-ed published in Fortune, economists Steve Hanke and David Walker cited the Treasury Department’s own FY 2025 consolidated financial statements to argue that the United States federal government is, by any standard accounting definition, insolvent. The figures they leaned on: $6.06 trillion in assets against $47.78 trillion in liabilities as of September 30, 2025, producing a negative balance-sheet position of $41.72 trillion.
What the balance sheet actually shows
The Treasury publishes an annual consolidated financial report that tallies the federal government’s assets and liabilities the same way a corporation would. The FY 2025 edition shows the government owes far more than it formally owns, a situation that has persisted for every single year the report has been published, going back to 1997.
The Government Accountability Office has issued a disclaimer of opinion on those statements for 29 consecutive years, largely because the Department of Defense cannot pass a clean audit. A disclaimer of opinion, in plain accounting terms, means the auditor could not gather enough evidence to form a conclusion either way.
The more jaw-dropping figure sits off the balance sheet entirely. Unfunded social insurance obligations, primarily Medicare and Social Security projected over a 75-year horizon, reached $88.4 trillion in FY 2025. That is up $10.1 trillion from the prior year. These obligations do not show up in the headline liability figure because they are not legal debts in the traditional sense. Congress can theoretically change benefit formulas. But if current law holds, the government has made promises it has no funding mechanism to keep.
Is the US actually insolvent?
Fact-checkers reviewing the op-ed in April 2026 confirmed that the Treasury did not declare insolvency. That framing originated with Hanke and Walker, not with any official government communication.
Their proposed remedies include the establishment of a formal fiscal commission, referenced in H.R. 3289, and support for an Article V constitutional convention that could produce a balanced-budget amendment, referenced in H.Con.Res. 15.
Why this debate is accelerating now
The $88.4 trillion unfunded obligation figure grew by $10.1 trillion in a single fiscal year. That rate of growth reflects a combination of demographic pressure, healthcare cost inflation, and the compounding math of long-dated projections.
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