Pakistan has operated under a “Ponzi scheme” of financing for 25 years, consistently borrowing to cover both spending and interest payments on its national debt. The country’s debt-to-GDP ratio steadily increased from 2012 to 2023, peaking with interest consuming 61% of government revenue in the year leading up to June 2024. Unlike private Ponzi schemes, Pakistan’s statehood allowed it to sustain this cycle through a captive lender base – primarily domestic banks funded by the State Bank of Pakistan – alongside external bailouts and currency devaluation. Recent budgets represent the first serious effort to break this cycle, aiming to reduce reliance on continuous borrowing. However, the author argues that while financial progress has been made, the underlying institutional issues that enabled the Ponzi scheme remain unaddressed, creating uncertainty about long-term stability. The current budget reveals that old incentives persist, potentially undermining the gains achieved.