Dollar Backed by Government Force, Not Gold, as U.S. Debt Nears $40 Trillion, Scholar Says

According to constitutional scholar William J. Watkins Jr. in an interview with Kitco News, the U.S. dollar is backed by governmental coercive power rather than tangible assets as the national debt approaches $40 trillion. Watkins, a research fellow at the Independent Institute, argued that the country has drifted from the founders' hard-money design, stating that "paper money is really only tied to the coercive power of the federal government."

The U.S. national debt stood near $39.6 trillion as of early 2026, with net interest projected to exceed $1 trillion in fiscal 2026, according to the Congressional Budget Office. Foreign investors held approximately $9.5 trillion in U.S. Treasuries, with Japan, the United Kingdom, and China as the largest holders, Treasury data showed. Gold traded above $4,100 per ounce on Wednesday.