A new NBER paper by Ricardo Delao and Wenhao Li explores public and investor perceptions regarding the US government debt load. The study found that perceived crisis risk is high and consistent across different groups, with the average stated probability of a U.S. debt crisis within ten years being near 50%.

Despite these concerns, the research reveals a significant disconnect between belief and behavior. Even when presented with current debt levels and Congressional Budget Office forecasts—which increased estimated crisis probability by 14.9 percentage points—the impact on actual behavior was minimal. For instance, 72.0% of investors reported no concrete portfolio changes.

Ultimately, the experiment confirms that beliefs translate weakly into intended action. While ordinary voters feared a debt crisis more than bond investors, neither group was significantly more likely to take action on their investments or voting decisions due to these fears. As the economists concluded, while the music is playing, you still have to dance.