A recent New York Post piece floated an old idea with a modern twist: cancelling the U.S. national debt, framing it as “An Ancient Sumerian Solution to Our $40 Trillion Debt.” The argument treats debt as a purely human-made accounting system that can simply be reset. While money is indeed a social construct, claims on real resources are not. Canceling $40 trillion in public debt would not make those resources disappear—it would redistribute who owns them.
Imagine the impact on pension funds, individual retirement accounts, insurance companies, and households that hold government bonds. The losses would also hit currency holders through higher inflation. This is one reason gold has been trading near $4,400–$4,700 per troy ounce (31.1 grams) in recent months—investors are seeking an inflation hedge and a store of value outside the traditional system.
The real question is not “Can we cancel the debt?” Of course, a government can attempt it. The better question for anyone focused on financial independence is: “Who gets robbed when we do?” Historical Precedents Offer Caution, Not Comfort.
History provides a few instructive examples:
