Source: DC Journal – Posted to Finance May 2025 – By Les Rubin
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.
Today, America is insolvent — it cannot meet its obligations through revenue alone. We avoid default and bankruptcy because investors still lend to us. In short, we are living on a credit card. As long as that card swipes, the music plays. If it ever declines, the party will end, and with it, the fiscal stability of the world’s largest economy.