Recently, many people have been discussing the risk of U.S. debt default, with claims that a black swan event could erupt in June, causing the market to plummet. Honestly, these statements are either misleading by their own media or intentionally creating panic. I’ve spent some time compiling a bunch of data to clarify this matter.

First, regarding U.S. debt default, there are actually two different scenarios, with completely different natures.

One is a technical default. Simply put, it’s when the U.S. Congress gets stuck on raising the debt ceiling or cannot agree on the fiscal budget, leading the Treasury Department to be unable to make payments temporarily. But this doesn’t mean the U.S. has no money; it’s just that Washington is embroiled in internal disputes. It’s like your bank card being frozen—there’s still money in the account, but you can’t withdraw it temporarily. In 2011, Obama and the Republicans fought fiercely over healthcare reform and fiscal stimulus, nearly pushing the debt ceiling to the brink of default. Such situations have occurred several times in U.S. debt history; fundamentally, it’s political infighting, not an inability to pay.

The other is a substantive default, like Argentina or Sri Lanka, where they truly have no money to pay back. But the U.S. is almost impossible to reach this point. Why? Because the dollar is printed by the U.S. itself. If a default were to happen, they could just print more money at full speed. Argentina defaulted because it owed external debts in euros and dollars, which it couldn’t print itself. Of course, printing money recklessly has costs—namely inflation. During the pandemic, the U.S. flooded the economy with liquidity, and the dollar was effectively “defaulting implicitly” through depreciation.

Recently, there’s been rampant talk about “$6 trillion in U.S. debt maturing in June,” with some even claiming it’s a trap. But to truly understand the U.S. debt market, you need to focus on the key points. Many people obsess over the monthly maturity volume of U.S. debt, but that’s not the critical factor. The real importance lies in the issuance volume of long-term bonds over one year.

The U.S. Treasury follows a pattern: long-term debt is issued according to a plan, while short-term debt is used for emergency needs. Every year in January, April, July, and November, the Treasury plans the next quarter’s long-term bond issuance, which generally remains consistent. If a deficit suddenly surges, they issue more short-term Treasury bills to fill the gap. Short-term bonds have short maturities and flexible demand; as long as the interest rate is slightly above market levels, capital will flow in continuously. It’s like printing an extra $50 bill—its face value doesn’t drop to $49.50.

According to the U.S. Treasury’s monthly reports, the maturities of U.S. debt from April to June are approximately $2.36 trillion, $1.64 trillion, and $1.20 trillion, respectively, which are far from the $6 trillion figure. Even if we include new issuances in April and May, the theoretical maximum maturity in June would be around $5.3 trillion, with actual figures likely around $2 trillion. It’s not nearly as dramatic as some claim.

Will resolving the debt ceiling lead to a liquidity crisis? I think the likelihood is low. The U.S. banking system still has hundreds of billions of dollars in reserve buffers, far from a true “cash crunch.” If market demand for short-term debt declines, the Treasury can slow down issuance and gradually replenish funds. Moreover, the Fed has already slowed its balance sheet reduction and introduced standing repurchase agreements, allowing primary dealers to easily obtain financing from the Fed when needed.

Ultimately, U.S. debt remains the lowest default risk among global bonds, and that’s no exaggeration. Although U.S. debt levels are approaching record highs, this is actually normal. Debt is equivalent to money; economic growth naturally accompanies increases in debt and money supply. As long as debt is denominated in dollars and market confidence remains, the U.S. can sustain itself through Fed bond purchases and overseas capital inflows.

So, under what circumstances would the dollar continue to depreciate or even lose its credibility? Ultimately, exchange rates reflect a country’s economic performance. The U.S. maintains its strength mainly because of global leadership in technology and a relatively stable political system. If some major event disrupts this stability and causes a collapse of the U.S. economy, then the dollar would be forced to loosen and depreciate. During the 2008 subprime crisis, the U.S. printed money on a large scale, and the euro appreciated against the dollar by 25%. Additionally, a downgrade in credit ratings can have an impact. Although the U.S. has maintained a AAA rating from S&P for a long time, issues like the debt ceiling crisis in 2011 and recent tariff disputes have led to a downgrade to AA+. Still, a “lame duck” is bigger than a horse—while below Germany’s AAA, it remains higher than Japan’s A+.

Recently, the dollar index has fallen mainly because Trump increased political and economic uncertainties in the U.S. But even so, it’s a bit far-fetched to say that U.S. government debt will default. Trump’s efforts to reduce debt repayment pressure and pressure the Fed are real, and that’s characteristic of the separation of powers. As long as this system functions normally and there’s no dictatorship, the U.S. is unlikely to experience a genuine debt default in the foreseeable decades.

Therefore, market fluctuations are normal, but the long-term super bull market logic still holds. Regarding the history of U.S. debt defaults, we must remember: technical defaults are just political games; substantive defaults are the real crisis. Currently, the U.S. is facing at most the former.