$40,047,425,768,420.22
That is the actual number posted by the U.S. government on Tuesday, August 18, 2026.
U.S. government debt hit $40 trillion on Tuesday, August 18, 2026. On Monday, the 17th, the government added some $53 billion and then lopped another $60 billion on top of that on Tuesday. $113 billion dollars in just two days!
Where did the money go? Who knows. The U.S. government is so vast, so poorly managed, and so free-spending with money it doesn't have that it might take a team of forensic economists a week to figure it out. Needless to say, it's been spent, it's gone, and it's likely never to be repaid. The government’s tally for interest costs so far for 2026 is $1.37 trillion - a 20% increase on the same period a year before.
Seriously, who in their right mind would lend any money to any entity that has a track record such as the U.S. government? They pay back their debts, for sure, but then borrow more to finance the money they just spent and plan on spending in the immediate future. At some point, lenders are going to call in their tickets and demand payment or simply stop lending. Already, many foreign governments have stopped buying U.S. debt. Many of them are selling it, some of it certainly at a loss. 30-year bonds bought during the ZIRP (sero interest rate policy) period have become nearly worthless in just 10-15 years. 30-year bonds between 2010 and 2020 were/are paying 2-4 percent when current rates are above five percent. Nobody will buy them at par, or even close. They don't keep pace with inflation. Those bonds are dead money. If you hold them, you lose to inflation. If you sell them, you lose money on the principal. Ouch!
The reckoning, long overdue, has commenced. Nobody wants to finance the U.S. government, and for good reason... many good reasons. The U.S. government starts wars and seldom finishes them. They U.S. government reneges on most of its treaty obligations. They steal from other countries, confiscate funds, sanction people and countries they don't like and are generally a pain in the ass to the rest of the world. Who needs them?
Well, retirees need them. Social Security recipients, government pensioners, disability survivors and many others all rely on regular payments from the U.S. government to maintain their lifestyle. Stop paying these people and the whole financial structure of the United States collapses.
Or does it?
If, all of a sudden, the U.S. government declared bankruptcy and stopped paying its millions of beneficiaries, stopped sending out SNAP payments (food stamps) and other welfare-related stipends, what really would happen? Would everybody, all of a sudden, be broke, unable to pay their mortgages, rent, utility bills, feed themselves and their families?
Probably not. There would be a reset. The value of the U.S. dollar wouold fall dramatically within weeks, if not days. The stock market would crash. The biggest winners would be those with savings in assets outside the U.S. financial system, like gold, silver, other tangible assets, like high quality stocks, certain real estate holdings, art. Naturally, real estate, stocks, and art would take a hit in U.S. dollar terms. Gold and silver, however, would skyrocket to unimaginable levels. An ounce of gold might be worth $30,000, and it wasn't the gold that appreciated in value, it was the dollar that collapsed causing gold to be much more valuable in dollar terms.
How would people respond?
Though it's highly unlikely that the U.S. government would just one day up and declare bankruptcy and cancel all of their obligations, the politics would generally trend towards austerity in terms of cutting benefits rather than completely curtailing them. People at the high income end of the Social Security spectrum would likely face the most severe cuts. High-income individuals might see SS benefits slashed by 25-40%, the reasoning being that these people are not dependent on their retirement benefits and have enough in personal assets to maintain their lifestyles. Mid-range beneficiaries might experience cuts of 10-15%. The bottom tier may see no cuts at all.
In the end, it becomes an argument of relativity. The rich would still be rich, though not as rich as they thought, the poor still poor, and the middle a little less fortunate than they thought. Life would go on, but in the business world, jobs would be cut, possibly drastically. Some businesses might disappear altogether. Unemployment would be very high and there would be a great deal of economic suffering, some of it due to bad personal choices, some due to government mismanagement, some due to business incompetence.
Life in America, in the face of a financial catastrophe, would experience extreme changes, mostly in groups defined as middle class. As it already stands, there are more than enough people on the fringes, or homeless, or about to be destitute. Many Americans are already at the edge of survival. An economic crisis would throw them over the edge.
Crime, mostly in the form of theft, fraud, and petty offenses, would rise. Crackpots and false prophets would emerge. Under the most extreme conditions, inner cities would experience riots, looting, and general choas from a poor population with nothing to live for and nothing to lose.
As it was during the Great Depression of the 1930s, not everybody would suffer. Many people, especially those with needed skills and positive attitudes, would do well, even prosper. The aim for most people would be to live within one's means and take necessary steps to preserve whatever lifestyle would be available, keep their families fed and safe, and try to carry on as well as possible.
Lots of people, meaning millions, would not be able to adjust. They would suffer not just economic pain, but health issues and possibly death. Suicide would become an option for planty of people.
Overall, it's not a pretty picture, but one which Americans should consider as possible, because all signs are now pointing to a breaking point, one in which the government is unable to sustain itself without even more excessive borrowing, and, without funding, it would lose control over the general public. Perhaps the best outcome from an economic collapse would be a reordering of priorities and a reshuffling of the political class. That may be about as far-fetched as one can imagine, seeing hordes of politicians afraid to be seen in public, vilified by what remains of an open, free press, and rejected as leaders by the public.
One can only hope. Americans are about to come face to face with the destiny designed by their runaway government.
Anticipating the open Friday, there has been the usual bounce in stock futures, though the prices being reflected for the final trading day of the week are simply noise, not signal, and are best disregarded. More and more, futures markets reflect hope rather than analysis.
In any case, an hour prior to the bell, Dow futures are up 290, NASDAQ futures are 182 ahead, and S&P futures are up 31 points. A more accurate understanding of what's happening globally is provided by gold and silver prices. They continue to rally higher and both precious metals have not stopped rallying. Silver has been kicking higher for a month now; gold's rally began in earnest about three weeks ago.
Overnight, silver touched $70 per ounce for the first time since mid-June. Spot gold was quoted as high as $4600, a level not seen since the middle of May.
Perhaps the most alarming market move is in bitcoin. It has moved from $64,000 to $77,000 in less than two days, a jump of more than 20 percent. Most of the other popular crypto issues have been rising along with it. The crypto market wants to tell the world that the U.S. dollar is unstable, unsafe for investment, and that electronic tokens are a better deal, the government unable to affect its price or dilute its value.
That may be a nice story, but the tangle of regulations and tax policies surrounding crypto investments says otherwise. The original premise of bitcoin being a safe, anonymous currency for peer-to-peer transactions has long ago been abandoned. Governments everywhere are involved in it, from ownership to regulation and for profit. Besides, China has banned it. El Salvador has abandoned it.
For the week, through Thursday's close, the Dow is down 973 points, the NASDAQ is off 263, and the S&P 500 has shed 144 points. While this week's decline has been notable, it is not in isolation. Stocks have been chopping around for months. The S&P made a new all-time high last week. Is this the end? Probably not.
Treasury Secretary Bessent has lit the fuse on the time bomb that is the U.S. treasury complex. The question on everybody's mind is, how far away from the blast zone do I want to be when it eventually blows up?
At the Close, Thursday, August 20, 2026:
Dow: 52,759.21, -703.84 (-1.32%)
NASDAQ: 26,067.17, -263.92 (-1.00%)
S&P 500: 7,641.16, -66.82 (-0.87%)
NYSE Composite: 24,548.26, -159.01 (-0.64%)
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