This article was posted on Wednesday, Feb 01, 2023

The Treasury Department tells us our national debt is over $31 trillion, the highest of any nation in the history of the world, even on an inflation-adjusted basis. There is no way the U.S. will ever pay off this gargantuan amount of debt. And it keeps growing exponentially.

The question I will pose is whether our national debt is limited to what the federal government owes, or if it should include debt owed by state and local governments, consumers, corporations and other entities. I will argue that it should. If we add in these additional debts, then America’s total debt skyrockets to just over $66 trillion.

Some will counter that these additional debts should not be included in the national debt since they are not direct obligations of the federal government. And that is true, at least not today. But does anyone believe the federal government would not print the money to pay off all or most these debts if we were facing a real financial crisis? I believe it would.

So, we’ll look at all of this debt, not just what is owed by the federal government. If we look at all these debts, we find that America has debt of a staggering $66 trillion. And that estimate is very likely on the low side. It should make for an interesting discussion, so let’s get started.

Treasury Department Says National Debt Is Over $31 Trillion

The Treasury Department recently reported that our national debt topped $31 trillion, the highest in any nation’s history and just over 150% of Gross Domestic Product, also the highest in our history. The National Debt Clock says our federal debt is $31.4 trillion.

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US National Debt

Here is a look at how federal government debt has exploded over time. As you can see, back in the 1960s and early 1970s, the government generally had balanced budgets. If we ran a small budget deficit in one year, it was usually made up by a small surplus in a subsequent year(s). That’s how it worked since we paid off our debt from World War II.

But then in the late 1970s, the national debt started to creep higher. Politicians decided it was okay to run budget deficits every year, thinking we’d pay it back at some point. But we all know what happened. The budget deficits just got bigger and bigger.

Politicians figured out they could curry favor with voters by spending more money. Budget deficits continued to grow. Many of us in the conservative movement argued that spending more than the government took in was a bad thing, and we called for balancing the budget. But our concerns fell on mostly deaf ears in Washington.

The last time we had a balanced budget was in 1991 when Bill Clinton was in the White House. But as you can see above, the budget deficits started rising rapidly nearly every year after that. The national debt has exploded since 2000.

U.S. National Debt is Really $66 Trillion, Not $31 Trillion

Yet America’s total debt is not just the $31+ trillion the government owes today. It also includes the debt owed by state and local governments, consumers, corporations and other entities.  If we add in these additional obligations, America’s debt is just north of $66 trillion. That’s roughly two and a half times our Gross Domestic Product, which is currently estimated at $27.5 trillion by the Commerce Department.

Below, we’ll look at why our national debt is really $66 trillion (and some argue it’s even higher) and why government officials, agencies and the mainstream media continue to report our debt at less than half that level. There are several reasons for this, of course, but the bottom line is, they don’t want us to know.

Longtime readers know I have been warning about our national debt for as long as I have been writing this newsletter, which is to say the last 30+ years. As our debt has zoomed out of control, I have warned that at some point it will spark a major financial crisis which will throw this country into another Great Depression.

Yet for that to happen, purchasers of our national debt will have to lose faith they will get their money back and stop buying our ever-increasing amount of Treasury securities each year and do something else with their money. So far, obviously, that hasn’t happened.

How long can this go on? No one knows. If you had asked me back in the 1980s when our national debt was around $1 trillion if I believed it could go to over $30 trillion (or $66 trillion as I will argue below), I would have said absolutely not! But here we are.

Now let’s look at why our national debt is really at least $66 trillion, not the $31 trillion the government wants us to believe.

On November 8, I wrote a column  about who owns our $31 trillion in national debt. You may recall the chart below which shows the breakdown. As you can see, just over 42% of our national debt is owned by US investors and institutions, with another $18.3 trillion owned by the Federal Reserve, and another nearly 9% by the Social Security Trust Funds.

Treasury Chart

So How Do We Go From $31 trillion to $66 Trillion? Here’s How

Businesses, consumers and especially the federal and state governments have become hooked on red ink as if it were crack cocaine. Two factors have fueled this borrowing binge: an era of low interest rates (that’s coming to an end) and falling real, inflation-adjusted wages – until just recently.

The undisputed King of borrowing obviously is Uncle Sam with its $31.4 trillion in national debt. That is well over 100% of our national Gross Domestic Product (GDP) of $27.5 trillion, as most recently reported by the Commerce Department. Some $6 trillion in Treasury debt has been added in just the past three years alone. Balancing the budget seems like a pipe dream these days.

Next add state and local government debt and unfunded liabilities. The American Legislative Exchange Council (ALEC) estimates this debt at just under $6 trillion. Then we add consumer debt of $16.5 trillion. Then we add $10 trillion of corporate and another $2.2 trillion of what is typically referred to as “Other Debt.”

And it all adds up and that’s how you get to $66.2 trillion in total debt, which is more than double the national debt of $31 trillion and roughly two and a half times our GDP.

America the Indebted

Now there are some who will argue it’s not correct to include consumer debt and corporate debt to America’s debt. These debts, they will say, are not obligations of the federal government, and this is true – at least today.

However, I would argue that these debts could be taken over and/or forgiven by the federal government – if we were facing a serious financial crisis – and I believe we will be at some point. Especially if we continue to run huge budget deficits and jack up the national debt.

Look No Further Than Biden’s Student Debt Forgiveness Plan

If you think I’m overstating the risk that the government could take over or forgive these consumer and/or corporate liabilities, I would remind you that the Biden administration tried to do this exact thing by forgiving tens of billions in student loan debt earlier this year for those who qualified under its rules.

Fortunately, a federal court ruled that the Biden administration halt this loan forgiveness recently, which it did. But the matter is far from settled, and it won’t surprise me if the Biden administration (or some future administration) gets its way and the student debt forgiveness resumes – despite the inflationary implications.

I would also note that I did NOT include Medicare and Social Security unfunded liabilities and pension and retiree healthcare liabilities for government workers who are retired but still living. These obligations, if included, push the national debt up by another estimated $105+ trillion. Many analysts believe it is misleading not to include these obligations when calculating our national debt. They have a point.

As I have written for many years, the federal budget goes up every year, and there are no signs this trend is going to reverse. Democrats AND Republicans have proven they have no regard for budget deficits or the national debt.

As noted above, over $6 trillion has been added to our national debt in just the last three years. President Trump added an extra $2 trillion of stimulus when the COVID pandemic broke out. Then President Biden shoveled out a whopping $4 trillion more in green-energy giveaways, state bailout funds, student loan bailouts and welfare handouts to families with no one working.

Gary D. Halbert is the president and chairman of Halbert Wealth Management, Inc. His Forecasts & Trends Weekly E-Letter may be obtained free of charge by subscribing at