Can U.S. refuse to pay its debt?

No, the U.S. can't simply "not pay" its debt because defaulting would trigger catastrophic economic consequences, collapsing financial markets, freezing credit, devaluing the dollar, and destroying global trust in U.S. debt, which underpins the world economy. While the government could technically print money to inflate away debt or cut spending, these also have severe impacts like hyperinflation, and the immediate fallout from a default would be disastrous, impacting pensions, military funding, and basic government services.

What happens if America refuses to pay its debt?

A default on all outstanding U.S. Treasuries would almost surely precipitate a global financial crisis. Further, because about 70% of the debt is held by Americans, most of the savings from foregone interest payments would be at the expense of U.S. investors.

Could the US just cancel its debt?

Eliminating the U.S. government's debt is a Herculean task that could take decades. In addition to obvious steps, such as hiking taxes and slashing spending, the government could take a number of other approaches, some of them unorthodox and even controversial. Below are some of these options.

Can America default on its debt?

Yes, the U.S. can technically default on its debt if Congress fails to raise the debt limit, allowing the Treasury to run out of funds, but it's an extreme, unlikely scenario that would be catastrophic for the U.S. and global economy, though Congress has historically always acted to prevent it by raising or suspending the limit. A default would mean missed payments, plunging markets into chaos, spiking interest rates, halting federal services, and damaging the dollar's global role, effects unseen in modern times. 

How can the US be in debt to itself?

The U.S. is "in debt to itself" primarily through Intragovernmental Debt, where one part of the government (like the Treasury) owes money to another (like Social Security trust funds), representing future obligations for programs like Social Security and Medicare, but not impacting overall national finances; the broader national debt is owed to public and foreign holders via Treasury bonds, arising from annual deficits where spending exceeds tax revenue.
 

What Happens If The U.S. Can’t Pay Its Debt?

What would happen if the US paid off all its debt?

If the U.S. paid off all its debt, it would trigger an economic crisis by eliminating safe investment options (Treasury bonds), causing a massive cash glut, crashing interest rates, disrupting monetary policy (Federal Reserve operations), forcing cuts in government services/spending, and potentially leading to a depression as the economy would lose its primary safe asset, disrupting the entire global financial system that relies on U.S. debt. The process itself, whether through extreme taxes or printing money, would likely cause hyperinflation or deep recession, while the end result removes a critical benchmark for the global economy.
 

Who owns over 70% of the US debt?

Who owns the most U.S. debt? Around 70-80 percent of U.S. debt is held by domestic financial actors and institutions in the United States. U.S. Treasuries represent a convenient, liquid, low-risk store of value.

How many Americans are 100% debt free?

Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve.

Why can't the US get out of debt?

The U.S. doesn't pay off its national debt because it consistently spends more than it collects in revenue, creating annual deficits that add to the debt, while also using debt to fund investments and maintain the global financial system, making large cuts or tax hikes politically challenging and unpopular. Instead of paying it down, the government often borrows more to service existing debt, relying on the U.S. dollar's reserve currency status and a stable economy to attract investors, but faces growing risks from escalating interest payments and potential loss of confidence. 

How many Americans have $20,000 in credit card debt?

A majority of Americans (53%) carry some, with an average balance of $7,719. However, a third of those carrying debt (32%) owe $10,000 or more, while almost 1 in 10 (9%) have credit card debt over $20,000.

What country is deepest in debt?

The country with the worst debt depends on how you measure it, but Sudan often leads in debt-to-GDP ratio (around 250%+) due to conflict, while Japan has the highest among developed nations (over 230%), and the United States holds the largest absolute debt (trillions). Other nations with very high debt-to-GDP include Singapore, Greece, and Italy, with emerging economies like Sri Lanka, Laos, and Pakistan also facing severe distress. 

Are Americans struggling financially in 2025?

Yes, many Americans struggled financially in 2025 due to rising costs, with surveys indicating nearly half felt their finances worsened, many living paycheck-to-paycheck (around 24-67% depending on definition), and significant portions delaying care or cutting groceries, despite some overall economic growth. Issues like unexpected expenses, difficulty affording necessities (housing, food), and high credit card debt were common, impacting middle-class families and diverse communities significantly, although billionaires saw wealth increase. 

Has the U.S. ever paid off its debt?

Yes, the U.S. paid off its entire national debt for the only time in history on January 1, 1835, under President Andrew Jackson, primarily from land sales and budget surpluses, but it was short-lived, with debt reappearing quickly and growing again due to economic events like the Panic of 1837, leading to continuous borrowing since. 

Is the national debt actually a problem?

Yes, the U.S. national debt is widely considered a significant problem by many economists and fiscal experts, as it's at historically high levels relative to GDP, potentially slowing economic growth, increasing interest costs (especially with recent rate hikes), crowding out private investment, limiting government flexibility for future crises, and possibly undermining confidence in the dollar, despite arguments that the U.S. can manage debt in its own currency. 

Can you go to jail for refusing to pay a debt?

No, you can't go to jail for not paying a civil debt. This is more commonly known as consumer debt, and it refers to many types of debt, including credit cards, medical bills, student loans, personal loans, payday loans, auto loans, mortgages, rent payments, utility bills, overdrafts on accounts, and more.

How fast could the US get out of debt?

Absent massive revenue increases – which President Trump has never mentioned – it would be literally impossible to pay off the national debt over the four years of the next presidential term, and practically impossible to pay it off over the ten-year budget window.

Can the US become debt free?

Based upon today's new economic and budget projections for the coming 10 years from the Office of Management and Budget (OMB): The United States can be debt-free this decade.

Is Trump going to forgive tax debt?

There is no IRS forgiveness plan officially introduced by Trump in 2025. While some campaign proposals have discussed tax simplification or reduced rates, they do not include debt cancellation for individuals with unpaid taxes.

Who is the US mostly in debt to?

The U.S. owes the most money to itself (domestic holders like U.S. investors, banks, and government trust funds), but among foreign countries, Japan holds the largest share of U.S. debt, followed by China and the United Kingdom, with Japan surpassing China as the top foreign holder around 2019. A significant portion of U.S. debt is also held by the Federal Reserve and other government entities (intragovernmental debt). 

What is the credit card limit for $70,000 salary?

The credit limit you can expect for a $70,000 salary across all your credit cards could be as much as $14000 to $21000, or even higher in some cases, according to our research. The exact amount depends heavily on multiple factors, like your credit score and how many credit lines you have open.

Which gender has more debt?

Men have 2 percent more credit card debt than women. Men have 9.7 percent more mortgage debt than women. Men have 20 percent more personal loan debt than women. Women have 2.7 percent more student loan debt than men.

Is being debt-free the new rich?

Yes, for many people, being debt-free feels like the new rich because it provides immense financial freedom, peace of mind, and security, even if it doesn't mean having millions in the bank; it shifts the definition of wealth from pure income to a lack of financial burdens, allowing for more saving, investing, and enjoying life without stress. While traditional wealth is assets minus liabilities, eliminating debt frees up income for wealth-building, making it a significant step towards financial well-being and independence, especially as many struggle with rising costs and stagnant wages. 

What is the highest US debt ever?

The highest U.S. national debt ever in absolute dollar terms is over $38 trillion, a record hit in late 2025, with figures surpassing $38 trillion and climbing towards $39 trillion by late 2025/early 2026, marking the fastest accumulation of trillions outside of pandemic spending. While the dollar amount is a record high, the debt-to-GDP ratio, a better measure of debt burden, exceeded 100% in 2013 and reached about 124% by fiscal year 2025, nearing its all-time peak from World War II.
 

Who was the last president to balance the US budget?

The last president to oversee a balanced federal budget was Bill Clinton, whose administration achieved budget surpluses for four consecutive years, from fiscal years 1998 to 2001, marking the first sustained period of budget balance in decades. This rare feat was due to a combination of economic growth, spending cuts, and tax increases, and it ended with the start of the new millennium, after which deficits returned. 

Does China buy US debt?

Yes, China buys U.S. debt (Treasury securities) as a major foreign holder, second only to Japan, primarily to manage its currency (keeping the yuan lower for export competitiveness) and invest its large foreign reserves in safe, liquid assets, though their holdings have decreased from peak levels. While China has reduced its holdings in recent years, it still holds hundreds of billions in Treasuries, financing U.S. debt and earning interest, but a sudden mass sell-off is unlikely due to mutual economic harm.