WASHINGTON, D.C. — Viral claims that the federal government has declared itself “insolvent” are spreading rapidly online, alarming Americans already uneasy about inflation, debt, and the long-term stability of the economy.
But there’s a crucial distinction: the U.S. Treasury did not declare bankruptcy — and legally, it can’t.
What did happen is more nuanced — and, in some ways, more concerning.
The Spark: A Troubling Balance Sheet
The controversy stems from the latest annual financial report released by the U.S. Department of the Treasury.
The report shows:
Roughly $6 trillion in assets
More than $47 trillion in total liabilities
On paper, that leaves the federal government with negative net worth — a figure some…