Insolvent: adjective
1: unable to pay debts as they fall due
2: having liabilities greater than the market value of assets held
The United States government has racked up massive debt by spending far more than its revenues. Like a person with a limited income and bills to pay, if the debt grows large enough, the government will be unable to pay the interest on the debt and will therefore be insolvent.
This series of posts addresses these questions:
- What is the deficit?
- What is the national debt?
- What are our unfunded liabilities?
- Why is the debt a serious problem?
- What happens if the United States does become insolvent?
- Is insolvency avoidable?
- What should I do?
These are all very important questions. It is my opinion that insolvency is already unavoidable except by means that will be an even greater disaster, such as hyperinflation.
To see some of the numbers involved in this series in realtime, along with some past years and estimates of the future, see the US debt clock.