Debt Dollars – The Unused Leverage

By Adil Aboobakar, CFA, World BEYOND War, April 28, 2024

U.S. Treasuries or War Bonds?

When U.S. taxpayers protest the use of their tax dollars to continually fund wars, the assumption is only 67% correct, as of the first Fiscal Semester 2024 [1].

The assumption is that the U.S. government is only funded by tax dollars. Yet, no.

The U.S. government borrows. And it can borrow very easily, from both Americans and the whole world. The latter is often very enthusiastic in lending.

In fact, there are reasons why a government might prefer to borrow to fund wars rather than increase taxes. It is cheaper, quicker, and puts less stress on the voters’ pockets. And if the government can borrow from other countries, far from home, that is even better. We have seen this during the Iraq War, and during the Gaza War. Swap shoes for a second, it makes political sense.

U.S. Treasuries are debt securities issued by the U.S. Department of the Treasury (USDT), the national treasury and finance department of the federal government. The purpose of these debt securities is to finance the federal government’s borrowing needs, including to fund wars.

It is almost heretical today for an investment professional to call U.S. Treasuries, “War Bonds.” But the USDT is familiar with debt securities issued to fund wars. The department used to have exactly that label for them. As an example, take a look at “My Japan”, a blatantly racist, anti-Japanese, propaganda film produced by the USDT in 1945 as a “pitch” for the 7th War Loan [2].

After World War II, the USDT outgrew the need for such propaganda to seduce lenders. Running up to the present day, U.S. Treasuries have become widely accepted as one of the safest investments in the world. The yield quoted on U.S. Treasuries is even referred to as the “risk-free rate.” U.S. Treasuries are backed by the full faith and credit of the U.S. government, as long as one does not oppose the U.S. government too directly.

Academia also seems to brand the minds of finance students early on with that notion. Finance connoisseurs would further tell you that the U.S. imports more than it exports (a trade deficit), and the result is the holding of U.S. Treasuries by the exporting foreign countries. They would also tell you that the U.S. Dollar is the international reserve currency, used for international trade, and U.S. Treasuries are necessary to keep Dollar reserves.

Concurrently, the same bunch might tell you that they disagree with the wars being waged, or funded, by the U.S. government – but they will not dissent from investing in U.S. Treasuries. If they admit that U.S. Treasuries are aiding the financing of wars, they will make the excuse that selling U.S. Treasuries too fast will endanger the global financial system.


U.S. Treasuries are functioning as War Bonds.

The debate is perhaps only to what extent U.S. Treasuries are war bonds.

Consider the period between October to December 2023. The timing of events is almost unreal.

During that period, the Israeli army, backed financially, and otherwise, by the U.S. government, was assaulting a civilian population, including women and children in Palestine. The weapons used in this assault were supplied by U.S. weapon manufacturers, which benefited from billions of dollars in contracts awarded by the U.S. government.

Within the same timeframe, the U.S. government ran a fiscal deficit of $510 billion [3], i.e., government revenues, including taxation, were short by $510 billion. To partly fund this deficit, $337 billion in U.S. Treasuries were purchased (net) by non-U.S. holders [4], i.e., the rest of the world, which also held $ 8 trillion at the close of December 2023. The world funded 66% of the shortage in funding of the U.S. government, at a very critical period.

Now, on 27 October 2023, 121 countries voted in favour of UN resolution ES-10/21, calling for a ceasefire [5]. Out of these 121 countries, funds from 36 countries purchased a net amount of $144 billion in U.S. Treasuries during that critical period and held $3.6 trillion at the close of December 2023: Ireland, Belgium, South Africa, Malaysia, Turkey – just to name a few odd names among the 36.

They called for ceasefire, but they funded the fire. They recognised a genocide, or a crime, but they allowed the funding of a crime – which makes it a financial crime.

How did we reach a point where all justifications are superseded by the quasi-unlimited funding provided to the U.S. federal government? Is the stability of the global financial system dependent on providing that quasi-unlimited funding to a government financially and politically supporting a genocide?

Now, in this headlock, is there some form of hope?


The Leverage

Sanctioning U.S. Treasuries for raising funds for the purpose of war, or classifying the purchase of these instruments a “financial crime,” has never been done before. As outlined above, you might even be labelled a heretic for doing this. Yet, the trail is there.

U.S. Treasuries are purchased by funds from countries across the world, some of whom favour a ceasefire. They are not far removed from the U.S. taxpayers who also favour a ceasefire. And, that said, the untaxed portion of U.S. taxpayers’ funds might also have been used to purchase U.S. Treasuries. Banks, insurance companies, pension fund managers, and wealth managers, in the U.S. and elsewhere, all use clients’ money to purchase U.S. Treasuries, financially supporting the U.S. federal government’s programs which include the funding of war contractors.

So, what if U.S. Treasury holders, internationally and domestically in the U.S., sensitive to the fate of the world, adopted the bravado of the taxpayers? Their struggle could actually be easier. Taxation is a legal obligation. Debt, or lending, is discretionary. No one forces you to lend. Surely, there must be other U.S. Dollar investments that are not federal debt, that are not funding the killing of women and children.

Creditors have leverage. Why should it be any different in the case of U.S. Treasuries? In fact, this approach to ending a war has been used before – in 1956 by President Dwight Eisenhower during the Sinai War [6]. When Britain, France, and Israel attacked Egypt in 1956, U.S. President Eisenhower warned Britain not to attack and when they did, he warned them that if they did not withdraw, he would destroy the British economy by selling their sterling bonds. Britain withdrew. It was a powerful and peaceful means to end a war.  Eisenhower reportedly ended that war in two days. We have put together information resources to explain this on Do you think it could be used again?



  1. Monthly Treasury Statement (MTS), Fiscal Data,, accessed on 23rd April 2024.
  2. My Japan, by U.S. Treasury Department, Internet Archive,, accessed on 23rd April 2024
  3. Monthly Treasury Statement (MTS), Fiscal Data,, accessed on 23rd April 2024.
  4. Treasury Capital International (TIC) System Data, U.S. Department of the Treasury,, accessed on 23rd April 2024.
  5. Meetings Coverage, United Nations,, accessed on 23rd April 2024.
  6. Why Was The Suez Crisis So Important?,, accessed on 23rd April 2024.

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