What we find

Evidence on valuation, sustainability, and fiscal expectations

People place substantial value on Treasuries as safe assets even while reporting high concern about debt sustainability. Official projections show why the fiscal outlook remains central: the long-run primary balance has been negative since 2013.

Government debt valuation · Survey evidence

Future primary surpluses account for less than one-sixth of perceived government debt value.

We ask respondents to divide 100 points across six possible sources of the market value of U.S. government debt. In the paper’s benchmark reconstruction, global safe-asset demand receives the largest average share in all three samples. Future primary surpluses receive 14.3–16.0 points.

25.7–29.5Safe-asset share of perceived value, points out of 100

14.3–16.0Primary-surplus share of perceived value, points out of 100

44.1–53.0%Assign zero value points to primary surpluses

Intuition: respondents attribute most Treasury value to sources other than future fiscal backing, especially global demand for an asset that is safe and easy to trade.

Explore the survey design

Perceived sources of value

How respondents decompose the value of U.S. government debt

Average points out of 100. Each bar shows the full value decomposition.

Bond investorsN = 985

29.514.716.915.114.19.7

Registered votersN = 1,001

25.714.317.815.717.19.4

Graduate Economics/FinanceN = 247

26.016.018.817.613.38.4

Safe-asset demandFuture primary surplusesDebt rolloverFederal Reserve purchasesGovernment assetsFinancial repression

Benchmark reconstructed means from the survey’s 100-point allocation. Safe-asset demand is the largest single source in every sample; future primary surpluses receive 14.3–16.0 points.

Government debt sustainability · Survey evidence

Perceived crisis risk is high in every sample and highest among voters.

Voters assign a 54.2% average probability to a U.S. debt crisis within ten years. The corresponding averages are 46.2% for bond investors and 41.2% for respondents with graduate Economics or Finance training.

54.2%Voters

46.2%Bond investors

41.2%Econ./Finance

Intuition: valuing Treasuries as safe assets today does not prevent people from worrying that default or very high inflation could reduce their value in the future.

See the full Wave 1 evidence

Perceived ten-year government debt crisis probability, sustainability concern, and crisis timing across three survey samples — Perceived ten-year crisis probability, concern, and most likely crisis timing. Points and whiskers report sample means or shares with 95% confidence intervals.

Fiscal expectations · Projections versus outcomes

Realized primary deficits exceed earlier fiscal paths on average.

Paths based on the latest CBO current-law baseline and legislation already scored tend to understate the primary deficit eventually realized. The average gap becomes larger at longer horizons.

$337Baverage gap, one year ahead

$772Baverage gap, five years ahead

$1.25Taverage gap, ten years ahead

Interpretation: the gap includes legislation enacted later as well as subsequent economic and technical revisions. It should not be read as a pure CBO forecasting error.

Explore the fiscal-expectations project

Quarterly projected primary-deficit paths colored by formation year and the realized primary deficit in black — Quarterly paths formed from 1999Q1 through 2025Q4. Each path combines the latest CBO baseline with legislation already scored; the black line shows the realized primary deficit.

The broader picture

Strong demand and fiscal concern can coexist.

Treasuries can be highly valued because investors want safe and liquid assets, while voters and investors still worry about the long-run fiscal path. The CBO series shows that these concerns arise against a backdrop of persistent projected primary deficits.

ValueSafe-asset demand receives the largest perceived value share
RiskAverage ten-year crisis beliefs range from 41.2% to 54.2%
OutlookThe projected long-run primary balance remains negative