United Airlines’ frequent flyer deficit in 2024 was $298 million, bringing the total frequent flyer debt to $7,441 billion. This is a ticking time bomb.
The $7.4 billion in frequent flyer debt is yet another stunning reminder of the terrible state of United’s finances. Spending miles and receiving miles are woefully out of balance – to the tune of nearly $3 million annually and rising – and instead of addressing this imbalance, United keeps choosing to make things worse.
Except this is all nonsense.
It’s a lift from an August 12, 2025, article by the Committee for a Responsible Federal Budget (CRFB), which is a regular fountain of nonsense. Here is precisely what the CRFB article said.
“The gross national debt hitting $37 trillion is yet another stunning reminder of the terrible state of federal finances. Spending and revenue are woefully out of balance – to the tune of nearly $2 trillion annually and rising – and instead of addressing this imbalance, Congress keeps choosing to make things worse.”There are direct parallels between United Airlines’ frequent flyer miles and U.S. federal deficits and debt:
1. Infinite Issuer
United: Can issue as many miles as it wants. There is no operational limit.
Federal Government: Can issue as many dollars as it wants. There is no operational limit.
(Federal Reserve Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press or, today, its electronic equivalent, that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”)
Neither needs to “get” miles or dollars before creating them. Dollars and mileage credits are not physical; they both are nothing more than bookkeeping notations.2. Deferred Redemption (a.k.a. “Debt”)
United: When miles are awarded but not yet redeemed, they show up as a liability (“deferred revenue”) — in 2024, that was $7.441 billion.
Federal Government: When the Treasury spends more than it taxes, the difference (the so-called “debt”) is really just outstanding government securities — promises to accept back the dollars it created in the first place. Both a dollar bill and a T-bill are dollar-denominated obligations of a government that can make an infinite number of dollars.
In both cases, these “debts” are just obligations to honor the thing the issuer itself controls.
3. Deficit as Ongoing Flow
United: Each year, miles created exceed miles redeemed — a “miles deficit.” But that’s precisely what keeps the program alive and attractive. If miles were never made in excess, the system could not function.
Imagine what would happen if United were to demand that its customers give back more miles than they received — similar to the federal government running a surplus. The entire system would collapse, just as the economy collapses when the government runs a surplus.
Depressions and Recessions Begin With Federal Surpluses
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- 1804–1812 48% 1807 Depression began in 1807
- 1817–1821 29% 1819 Depression began in 1819
- 1823–1836 99% 1837 Depression began in 1837
- 1852–1857 59% 1857 Depression began in 1857
- 1867–1873 27% 1873 Depression began in 1873
- 1880–1893 57% 1893 Depression began in 1893
- 1920–1930 36% 1929 Depression began in 1929
- 1947–1948 3.6% 1949 Recession began in 1949
- 1969–1970 3.4% 1970 Recession began in 1970
- 1997–2001 15% 2001 Recession began in 2001
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Federal Government: Each year, dollars spent typically exceed taxes collected — a “fiscal deficit.” But that’s precisely what keeps the private economy supplied with net financial assets. Without it, economic growth stagnates, and we experience recessions or depressions.
4, Control over Rules and Laws
United has complete control over all the rules about the use of its mileage credits.
The federal government has complete control over all the laws about the use of dollars.
5. Not a Threat
United’s miles: Nobody worries that a growing balance of unredeemed miles will bankrupt the airline. In fact, the mileage program is the airline’s largest profit center. (The airline loses money on flights.)
Redemption is completely under United’s control; it determines how mileage points are used, and predictable breakage occurs. Additionally, United can always issue more points if it wishes.
Federal “debt”: Likewise, it’s not a threat to the U.S. government. The federal government has the infinite ability to pay debts, interests or any other financial obligation denominated in dollars. The danger comes only from artificial limits (e.g., debt ceiling politics), not from the mechanics of issuing dollars.
IN SUMMARY United’s “mileage debt” is not a financial danger to United. It is a profit center. Likewise, the federal “debt” is not a financial danger to the government. It is a profit center for the economy.United’s mileage program and the government’s deficits are artifacts of accounting terminology, not solvency constraints. Both have minimal cost and are highly profitable — the former for the airline and the latter for the economy.
The danger isn’t in the numbers—it’s in the myths we build around them.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell
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