The U.S. government is insolvent. That’s not an exaggeration — it’s a conclusion drawn directly from the Treasury Department’s own fiscal year 2025 consolidated financial statements, which were released last week to near-silence in the media. Data shows that as of September 30, 2025, total assets were US$6.06 trillion and total liabilities were US$47.78 trillion.
Importantly, the $47.78 trillion in reported liabilities does not include unfunded obligations for social insurance programs such as Social Security and Medicare—which are disclosed separately in the off-balance sheet Social Insurance Statement (SOSI).
From fiscal year 2024 to fiscal year 2025, the government’s consolidated balance sheet position (excluding SOSI) worsened by nearly $2.07 trillion, reaching a staggering negative $41.72 trillion. Total liabilities are currently nearly eight times the reported asset value. The biggest drivers were a $2 trillion increase in federal debt and interest payable (now $30.33 trillion) and a $438.8 billion increase in benefits payable to federal employees and veterans (now $15.47 trillion).
The off-balance sheet situation is even more worrying. The 75-year unfunded Social Security obligation surged $10.1 trillion in one year, from $78.3 trillion in fiscal 2024 to $88.4 trillion in fiscal 2025, primarily due to a projected $6.9 trillion increase in the Medicare Part B shortfall and a $2.5 trillion increase in Social Security. The Treasury’s long-term fiscal forecast statement shows that the fiscal gap in FY75 widens from 4.3% of GDP in FY2024 to 4.7% in FY25.
If the $88.4 trillion in 75-year off-balance sheet debt is added to the $47.8 trillion in official balance sheet liabilities, the total federal debt will now exceed $136.2 trillion, roughly five times the annual U.S. GDP.
The U.S. Government Accountability Office (GAO) issued a disclaimer on the U.S. government’s fiscal year 2025 financial statements, marking the 29th consecutive year it has been unable to determine whether the statements are fairly presented. This is largely due to the Department of Defense’s ongoing serious financial management problems and weaknesses in the accounting of interagency transactions.
Not only do the financial media ignore consolidated financial statements, but most members of Congress and the public do not read consolidated financial statements. Documents like consolidated financial statements are not something you want to read before driving your car. If that wasn’t bad enough, most people can’t comprehend the trillions of dollars in financial statements. Therefore, it is appropriate to translate them into terms that people can understand.
