There was a very scary sounding report on CNBC last weekend that said the US government is “$16 trillion in the hole.” The balance sheet the article used was overly simplistic and extremely misleading. The asset side of the balance sheet showed just $2.7 trillion in assets, which is accurate, if you exclude almost all of the assets the federal government actually owns.
Because I am extremely lazy (though not as lazy as that article!), I am just going to point out a few of the US government’s assets that prove this point terribly misleading. For starters, the IER estimates that total fossil fuel resources owned by the Federal government are valued at over $150 trillion alone. These assets alone are 55 times the amount stated in the CNBC report. But that only scratches the surface. I haven’t even looked into the huge amount of federally-owned land and buildings that would surely amount into the hundreds of billions if not trillions of dollars. There’s also the gold resources. And there’s the trillions of dollars in its own liabilities that it owns via the Fed and Social Security funds. I have no idea what all of this would add up to, but it would probably be a net worth nearing $200 trillion or more. Maybe someone out there who is less lazy than I am can put an exact figure on it?
And none of this even touches on the operational realities behind the United States monetary system and the fact that we’re not going bankrupt unless we choose to go bankrupt. So don’t fret. The United States is not in the hole. Not even remotely close. And we’re not going to be unable to pay the bills on debt denominated in a currency we can print, unless we choose not to pay those bills.
NB – I should add that the “unfunded liabilities” don’t change the story. Even if you include the $30 trillion in unfunded liabilities, the assets the US government owns still give it a massively positive net worth.