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Survey evidence · Wave 1

What supports government debt, and how close is a crisis?

Current findings from screened bond investors, registered voters, and respondents with graduate Economics or Finance training.

Working paper results · Not peer reviewed
Survey overview

Finding 1 · Government debt valuation

Respondents divide government debt value across six distinct sources.

Respondents allocate 100 points across six possible sources of the market value of U.S. government debt. Across all three samples, the benchmark reconstruction gives global safe-asset demand the largest average share. Future primary surpluses receive roughly half as many points.

Safe-asset demand
29.5 investors · 25.7 voters · 26.0 Econ./Finance
Primary surpluses
14.7 investors · 14.3 voters · 16.0 Econ./Finance
Primary surpluses: zero points
53.0% investors · 51.3% voters · 44.1% Econ./Finance

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
29.5Safe-asset demand: 29.5 points14.7Future primary surpluses: 14.7 points16.9Debt rollover: 16.9 points15.1Federal Reserve purchases: 15.1 points14.1Government assets: 14.1 points9.7Financial repression: 9.7 points
Registered votersN = 1,001
25.7Safe-asset demand: 25.7 points14.3Future primary surpluses: 14.3 points17.8Debt rollover: 17.8 points15.7Federal Reserve purchases: 15.7 points17.1Government assets: 17.1 points9.4Financial repression: 9.4 points
Graduate Economics/FinanceN = 247
26.0Safe-asset demand: 26.0 points16.0Future primary surpluses: 16.0 points18.8Debt rollover: 18.8 points17.6Federal Reserve purchases: 17.6 points13.3Government assets: 13.3 points8.4Financial repression: 8.4 points
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.

Finding 2 · Government debt sustainability

Voters report the highest perceived crisis risk.

The average perceived probability of a U.S. debt crisis within ten years is 54.2% among voters, 46.2% among bond investors, and 41.2% among Economics or Finance graduate-degree holders.

Voters
54.2% average ten-year crisis probability
Bond investors
46.2% average ten-year crisis probability
Econ./Finance
41.2% average ten-year crisis probability
Perceived crisis probability, sustainability concern, and crisis timing across three samples
Subjective risk, concern, and timing measures with 95% confidence intervals.

Finding 3 · Beliefs and action

Concern is widespread, but it is rarely decisive.

Eighty percent of bond investors and 75.5% of voters report being at least moderately concerned about debt sustainability. Among voters expressing concern, debt was decisive for only 8.8% of their reported past voting choices. Even among the most concerned investors, 41.5% plan to reduce Treasury holdings.

80.0%concerned bond investors
75.5%concerned voters
8.8%voters for whom debt was decisive

How the findings fit together

People distinguish Treasury value today from fiscal risk tomorrow

Respondents can value Treasuries for their safety and liquidity while remaining concerned about future debt sustainability.

01Value and risk

Demand for a safe asset can support Treasury value even when people expect fiscal strains to increase.

02Concern and action

High concern does not automatically determine voting or portfolio choices because debt competes with other priorities.

03Who answered

The comparison covers 985 bond investors, 1,001 voters, and 247 respondents with graduate Economics or Finance training.

Paper authorsRicardo Delao and Wenhao Li